Reviewing your insurance needs can be done when reassessing your financial plans. As your life and financial portfolio changes, your insurance needs and tolerance for risk must adapt. These changes might be due to the purchase of a major asset like a house or a life event such as marriage, divorce, or retirement. Either way, having appropriate insurance policies should be part of your financial plans in order to mitigate whatever uncertainties come your way. Why pay for an out-dated policy that doesn’t cover your immediate concerns?
Here are some things you need to consider when reviewing your insurance needs:
• New job: With a new comes new insurance benefits and policies that can be better or worse than your previous . Make sure your insurance policies reflect what you are now receiving. You don’t want to pay for something you are already receiving. Neither do you want to be uninsured for something you were insured for previously. Reviewing your insurance needs during major financial and life events ensures you keep up with changing circumstances.
• Extensive renovations: If you make a major change to your house that doesn’t reflect the new value of your home, you risk not being properly insured in case of an accident.
• Growing your family: Updating your insurance after having a baby will protect your family in case of injury or death so they can expect a similar lifestyle even with half the income. Likewise, once your children leave the nest and become financially secure, your policy should change to avoid paying for things you no longer require.
• Estate Planning: Covering all your debt, obligations, and support after your death is important. You want to make sure your death is not an immediate financial burden, that expenses are covered, and support is in place for family members. Also important is to update the beneficiaries of a policy to avoid messy legal issues, and understand the tax implications of your insurance policy.
A financial advisor can help you determine your insurance needs, and can easily be found using Optimize’s Advisor Search tool.