What Components should change?
When your financial responsibilities shift over the course of various life events, it's worth taking a look at the specifics of your life insurance policy to make sure it can still accomplish your coverage goals. If your family circumstances or needs are different than they used to be, consider adjusting one or more of these components of your life insurance policy.
Beneficiary. The beneficiary, the person who will receive the life insurance benefit in the event of your death, may need to be altered along with your current family situation. For instance, if you're getting married, you may want to add your new spouse as beneficiary. On the other hand, if you're getting divorced, you may want to remove your ex-spouse as beneficiary.
Type of coverage. If you have term life insurance, which lasts only for a specific amount of time, such as 20 years, you may begin to see that you'll still need life insurance after that term is complete. For instance, if your term was set to end when you're 50 but you've remarried and now have young stepchildren in your forties, you may consider switching to a longer- term policy or to a permanent life insurance policy.
Benefit. Family dynamics progress over the course of time, so there may be cases where you'll want to update the benefit amount of your life insurance policy. For example, if you support a non-working spouse and three children, you likely need a larger benefit than if you and your spouse are both working and you have no children.
As life happens and your circumstances change, your life insurance policy can change right along with it. Take the time to honestly assess your needs and the needs of those you love, and talk with your life insurance provider to update your policy to fit your situation.