Dust Off Life Insurance Policies: Is it Time for a Life Insurance Review?

Life insurance is often something people purchase, file away, and rarely revisit. But as your life, family, career, and financial picture evolve, the coverage you put in place years ago may no longer align with your current needs.

A periodic life insurance review can help you determine whether your existing policies still support your financial goals, and whether your coverage, beneficiaries, or policy structure should be updated.

Life Changes Are a Good Reason to Review Your Coverage

Major life events can significantly change the role life insurance plays in your financial plan. It may be time for a review if you have recently:

• Gotten married, divorced, or separated

• Welcomed a child or grandchild

• Experienced a death or disability in your family

• Purchased or sold a primary residence, vacation home, or other significant property

• Paid off a mortgage or other major debt

• Had a child graduate from college or become financially independent

• Changed jobs, retired, or started or sold a business

• Taken on responsibility for an aging parent or dependent family member

• Experienced a significant change in your income, assets, or financial obligations

• Made changes to your estate or legacy planning

• Needed to update your beneficiaries

Not every reason for reviewing your coverage will come from a major milestone. Changes in your overall wealth, tax situation, business interests, charitable goals, or estate plan can also affect how much coverage you need and the type of policy that may be appropriate.

Look at Life Insurance as Part of Your Bigger Financial Picture

Rather than simply asking whether you have “enough” life insurance, consider what you would want your coverage to accomplish today.

For some families, life insurance is primarily intended to replace income and help provide financial security for a surviving spouse or children. For others, it may also play a role in estate planning, business succession, liquidity needs, charitable giving, or leaving a legacy for future generations.

Your needs can also change considerably over time. Someone raising young children and paying a mortgage may have very different priorities than someone approaching retirement with financially independent children and significant accumulated assets.

That’s why your current circumstances, not the circumstances that existed when you originally purchased the policy, should guide the conversation.

Don’t Forget Coverage Through Your Employer

Your review should include all of your life insurance coverage, not just individually owned policies. If you or your spouse receive group life insurance through an employer, consider how that coverage fits into your overall plan.

Employer-provided coverage may change or end when you leave a company or retire, making it important to understand how much of your financial strategy depends on that benefit.

Make a Life Insurance Review Part of Your Routine

Life insurance shouldn’t be a “set it and forget it” part of your financial plan. Consider reviewing your policies periodically and whenever you experience a significant life or financial change.

During a review, look at your coverage amounts, beneficiaries, policy ownership, premiums, policy performance, and how each policy fits within your broader financial and estate planning strategy.

Your financial life will continue to evolve. Your life insurance strategy should have the opportunity to evolve with it.

When was the last time you dusted off your life insurance policies? A conversation with your financial and insurance professionals can help determine whether your current coverage still aligns with your needs and long-term goals.