When should I update my Life Insurance Policy?

There are many reasons to update an existing Life Insurance Policy. Your life may have changed dramatically since you first purchased your life insurance policy. Contact your life insurance agent if your life has changed in any of the ways we listed below.

Major Purchase: If you make a major purchase you should contact your life insurance agent to set up a review and possibly update your life insurance policy. There are a couple items we consider major purchases. An automobile, swimming pool or boat is not considered a major purchase and should not be reflected within your life insurance review. A major purchase is a new home, refinancing your home, and a College Education. Purchasing a home or a College Education is a substantial investment and should be covered in your death benefit to ensure your family isn't burdened with the expenses.

Relating to a College Education when you have children you should consider a Life Insurance Policy review to ensure their College Tuitions are covered with your death benefit.

Marriage or Divorce: If you get married or divorced you should contact your life insurance agent to possibly change the policy figures but more likely to change beneficiaries. Your life will change when you get married or divorced so in any case of a life changing event you should contact your life insurance agent.

Other life changing events: Any event that will significantly alter your life like an ill family member, changes to you or your families health or coming into a decent amount of money be it professionally or by inheritance. A rule of thumb could be to consider a life insurance policy review when your life has seen a major change.

If you forsee the change in the near future it is better to act now than to wait so be sure you to contact your agent in a timely manner.

Why buy a 5 year term or 10 year term life insurance policy?

Why you should consider buying a lesser term life insurance policy

The title of this article may be a bit off. Not everyone should buy a shorter term life insurance policy however, there are some very good reasons why individuals should if the circumstances match up. In this article, I'll mention some obvious and not so obvious reasons why you or one of your family members should consider purchasing a 5 year term life insurance policy or a 10 year term life insurance policy.

Free Term Life Insurance Quotes

It's cheaper!

Ok, this is the obvious reason one may consider purchasing a shorter term life insurance policy. The longer the term the more expensive your premiums. So a short term insurance policy is quite a bit cheaper. The reasons for this is that it is less risky for the insurance company to insure. Of course your policy premium still has a lot to do with your health but in general the shorter the term, the cheaper the premiums. Saying that, I would not recommend purchasing a shorter term simply because it's more affordable. You would find out that once the policy is up your rates would go up and it would be quite a bit more to purchase three 10 year term life insurance policies back-to-back then to purchase one 30 year term life insurance policy. So why would someone want a shorter term?

It's for certain circumstances

When you know when your burdens are significantly reduced you can purchase a term life insurance policy to end at the right time. For example, if you're last child is a senior in high school and your well on your way to become an empty nester you can assume that your costs associated with education, and every other expense associated with children will be gone in 5 years then why not purchase a policy to cover that period. If you are in your 60's and are close to medicare or possibly cashing out some investments then you may consider a shorter term life insurance policy. Maybe your close to paying off your mortgage and all of your other expenses are covered through a different policy you may want to consider purchasing a 5, 10 or even 15 year term life insurance policy.

I believe we've made our point. It's all about timing and each term life insurance product is designed to meet certain instances and circumstances. Not every life insurance company offers shorter term life policies so you may need to shop around.

Keep your Life Insurance Policy Current!

There are many reasons why a Life Insurance policy lapses. The two most common reason an individual let's a Life Insurance Policy lapse is because they forgot to renew it or they don't think they can afford the insurance premium.

Allowing a Life Insurance Policy to lapse is a very bad thing. You may think you can simply call your life insurance company and reinstate your policy some time after it lapses similar to a cable, cell phone or electricity bill but the fact is you can't. If you allow your Life Insuracne policy to lapse it is very likely you will need to apply for a new policy. This can be very costly as you may have had a term life insurance policy locked in 10 years ago when you were young and healthy. There is no doubt your premium will now go up even with the same death benefit but how much the premium goes up depends on how well your health is. If your health isn't as good or you've taken up smoking or any change in your health will cause an increase in your life insurance premium.

Lets examine the most common reasons a Life Insurance policy lapses. Don't forget to renew it! Most life insurance companies have made it very easy to ensure you never forget to renew it. By implementing automatic withdrawal from your bank account you never have to write a check or mail a payment again. Your premium is deducted from your checking or savings account when the premium's due. The 2nd most common reason individuals allow life insurance policies to lapse is because they claim they can't afford it. This is a bad excuse as you can't afford not to have life insurance. When you die you will have expenses and you should be responsible to cover these expenses. There are ways to make a life insurance policy more affordable. The most common way is to adjust the frequency of your payments. Inquire about yearly, semi or quarterly payments as most life insurance companies will give you a discount for these payment types. Inquire with your insurance company about possibly lowering the death benefit. The most important thing to do is ask your company what options are availble but do not let your life insurance policy lapse.