Five Times You Should Take Another Look at Your Life Insurance

Life insurance is easy to think of as something you buy once and put away.

Life does not work that way.

Your income changes. Families grow. Mortgages get paid down. Children become adults. Businesses change. Retirement gets closer.

The coverage that made sense at one point in your life may deserve another look later - even if nothing is necessarily wrong with the policy you already have.

Here are five moments when reviewing your coverage makes sense.

1. You bought a home

A mortgage is often one of the largest financial obligations a family takes on.

If one income disappeared, could the people remaining in the home continue making the payments?

That is one of the questions worth considering after buying or refinancing a home. The answer will be different for every household.

2. You got married or your family grew

Marriage, a new child or another person becoming financially dependent on you can significantly change what you want life insurance to accomplish.

The important number is not simply the amount of insurance you own.

The better question is: What would the people who depend on me actually need?

That might include replacing income, paying household expenses, handling debt, funding education or simply providing enough financial breathing room for a family to make decisions without immediate pressure.

3. Your income changed substantially

A promotion, career change, new business or major increase in household income may be good reasons to revisit coverage.

The reverse can be true as well.

Insurance should fit your current circumstances and budget. More is not automatically better. The goal is appropriate protection based on what you are trying to accomplish.

4. You started or changed a business

Business ownership creates another set of responsibilities.

Your family may depend upon the income the business produces. The business itself may have obligations, partners, employees or debt.

That does not automatically mean you need a particular type or amount of coverage. It does mean your financial picture has changed enough to justify a conversation.

5. You cannot remember the last time you looked at the policy

This may be the easiest test of all.

If the policy has been sitting in a drawer or electronic folder for years and you are not quite sure what it covers, who the beneficiary is or why you bought it in the first place, review it.

A policy review does not have to mean replacing anything.

Sometimes the result of a good review is simply: You're still in good shape.

That is useful information too.

Life insurance should follow your life

The purpose of reviewing coverage is not to find a reason to buy another policy.

It is to make sure you understand what you currently have and whether it still lines up with the people, responsibilities and goals in your life today.

If something significant has changed since the last time you looked, that is probably a good reason to take another look.