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When Do You Think Is The Right Time To Review Your Life Insurance Policy?

When Do You Think Is The Right Time To Review Your Life Insurance Policy?

Considering effective performance of your financial plan needs timely review of the same. Not only it just requires a yearly review but with your growing age as you pass through different stages with growing responsibilities and changing financial net worth also would require a complete reviewing of the plan and renewing of objectives. On similar lines, as we all know that since life insurance cover required at various stages of life is an important part of the plan so review of your life insurance policy also becomes paramount. We all know that your life insurance plan is like the back up for achieving your financial objectives. As your financial objectives is linked to attaining financial security for family where your term plan plays a pivotal role so reviewing it from time to time become very necessary .

So while the fact of reviewing your life policy from time to time is important you should look at various events in life when considering a reviewing decision.

  1. Change in employment status: A scenario like this can be looked from the perspective of change in the income value. It can be a change of your employer or merely a promotion.  In both the case the income in hand increase which leads to change in spending pattern which leads to changing lifestyle. In a situation like this you should look at increasing the sum assured of your life insurance plan so that in case of your demise it become easy for your family to manage their lifestyles at current cost.
  2. Increased tax burden: As your financial position change the tax incidence on your income also changes accordingly. You will now fall in a different tax bracket and you would have to pay a higher amount of tax. Since investment did into life insurance plans have the privilege of getting you tax rebate, reviewing your life insurance policy accordingly as per your financial plan can you help you get away from the higher tax.
  3. Getting married:  One of the biggest milestones in one’s life is getting married. It is not only serious emotional decision but also need considerable restructuring of your expenditure pattern. Plus if you are still the single the bread earner in family now you have an additional person to share your income and this bring an extra financial liability. In a scenario like this you may found that your spouse may be already covered but you need an extra amount of cover to pay for this newly created liability if you are not there to support your spouse.
  4. Purchasing a home: Buying a home is always a big financial decision and if the finances are not managed a proper way can lead to long term financial ramifications. While buying an asset of such monetary value we generally follow a procedure where we try to pay 20% out of our own savings and rest we try to cover for a loan. This rule applies even if we buy a house but while approaching for 80% money as home loan we should try to assess whether our life cover is enough to repay your loan if you are there. In case it is insufficient we can review our existing policy and take some extra cover. We can even assign a part of the cover to the home loan company so in case of unfortunate event things can be taken care of affecting family’s peace of mind.
  5. Becoming parent: One of the greatest joys is one’s life is being a parent but the toughest part is raising them. Cost of education is already on an exponential rise. Keeping these things into perspective one should be sufficiently covered under a term plan so that in case of unfortunate events things can be taken care of. A proper review of your life insurance plan at this stage helps you to leave a financially secure legacy for your child.

A planned approach to your insurance needs is the right mantra for financial success. Similar to reviewing your financial plan in a timely manner doing it for your strategies to achieve financial goals is also important and that is where need for reviewing your life insurance policy at different stages of life is of paramount importance.