Make Sure Your Life Insurance Coverage is Sufficient

With a new year upon us, it’s always important to take stock of your insurance coverage to ensure that your family is covered in the event of the unthinkable. You should take a moment to review your insurance coverage with your agent and make sure that you have covered every angle to protect your loved ones. Worgess Insurance offers these suggestions when reviewing your life insurance policy.

Coverage Amount

Ask yourself: Would this still be enough today? The coverage amount was probably sufficient when you started the policy, but there are a number of changes that can affect this.

• Marriage or Divorce
• New Children or Dependents
• A Bigger Mortgage or Other Debts
• Income Changes

If your insurance coverage is just enough to cover funeral expenses, then you need to consider adjusting your coverage to replace income and also cover your family obligations.

Type of Policy

You should review your policy to ensure that is fits your goals. This can include:

• Term Life: Is the term length still appropriate? Is it close to expiring?
• Whole or Universal Life: Review cash value growth, premiums, and long-term costs.

Your needs at 30 are going to be much different than your needs at 45 or 60, so be mindful of this as you review your life insurance policy.

Beneficiaries

This is maybe the most important thing to consider, as you need to make sure your life insurance payout goes to the right people. Here are the questions to consider.

• Are beneficiaries still living? If your beneficiary has passed away, you need to update this as soon as possible to prevent any possible legal issues for your family.
• Are they still the right people? Marriage, divorce, death, birth…any number of life events can require you to need to update your policy to ensure you have the right beneficiary.
• Also check contingent (backup) beneficiaries. When the unexpected happens before you have a chance to update your policy, it’s a good idea to have a backup beneficiary listed on your policy to ensure your loved ones are covered.

Premiums & Affordability

Are premiums still manageable? For any number of reasons, you may need to change your policy, simply due to the overall cost. Here are some things to think about when considering the cost of your policy:

• Will Premiums increase in the future (especially with term or universal life policies)?
• Are you paying for riders you no longer need?

If money is tight, there may be ways to adjust coverage instead of canceling. Be sure to work with your insurance agent to find the right solution for your circumstances.

Riders & Policy Features

There are any number of riders and policy features that you can have on your insurance policy. You should review these, as well, to determine if they are still appropriate and/or necessary. These can include:

• Accidental Death Benefits
• Waiver of Premium
• Child Riders
• Living Benefits or Chronic Illness Riders

Make sure these still add value, but also make sure that you understand how they work.

Cash Value (If Applicable)

For permanent policies, you should consider the cash value. For example:

• How much cash value has accumulated?
• What are the interest rates or investment performance?
• Are loans or withdrawals affecting the death benefit?

Policy Ownership & Estate Planning

You should take the time to consider policy ownership and how that will affect your estate planning.

• Is the policy owned by you, a trust, or someone else?
• Does it still align with your estate plan?
• Could the death benefit create tax issues for your heirs?

This is especially important as your assets grow, so be sure to work closely with your agent.

Health & Insurability Changes

If your health has improved since buying the policy, you might qualify for better rates—or more coverage for the same cost.

If you need help navigating your life insurance policy to make sure your needs are covered, contact Worgess Insurance and schedule an appointment.