American consumers in the market for a life insurance policy may be surprised by the variety of options available.
For those new to life insurance, the specific nuances and attributes for each type of policy can be a bit daunting. An experienced financial professional can help guide customers through the process by assessing their life insurance needs and explaining the pros and cons of each type of life insurance.
But no matter what type of coverage is purchased, consumers should regularly review their policies for as long as they are in force.
Changes in family, job, and economic situations can affect both the need for and cost of life insurance. The life insurance needs for a family with three young children, student loan debt, and a mortgage may be very different than empty nesters who are beginning to prepare for retirement.
Routine assessment of life insurance needs with a financial professional is a critical part of financial wellness. In fact, households who have a written financial plan prepared by a financial professional are 21 percent more likely to be “very confident” or “extremely confident” that they will reach their most important financial goals.
Below are some tips on how consumers can stay engaged so that their life insurance coverage remains adequate under any circumstance:
- Set up a regular check-in schedule with their insurance agent.
- If unable to meet with the agent, contact the life insurance company directly.
- Review changes in household situation, such as new children, marriage, divorce, or other family members joining the household.
- Discuss changes in financial obligations such as a purchasing a first home or paying off student loans.
- Analyze the current life insurance policy to see if the benefit remains adequate. For example, does the policy provide a large enough death benefit that would allow their household to remain in their home?
- For policies that give flexibility in setting premiums and the death benefit, understand the payment schedule and updated projections based on current economic conditions.
- Assess whether changes need to be made to any policy to provide adequate coverage.
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