When searching for a life insurance policy, most individuals will seek out advice from a licensed insurance agent who will guide them through the process, as the information can be overwhelming.
Consumers are often confused about what a life insurance policy covers exactly and what they can expect to receive in return for their premiums.
This is where an insurance agent comes in handy.
The planning process typically begins with an agent asking about your insurance needs, the desired coverage you would like, information regarding your health history and income status. This information will be used to determine the ideal policy for the prospective insured and a policy will be issued out.
However, the process should not end once a policy has been issued. Both the insured and insurer are responsible for maintaining the policy and making any needed adjustments.
It is not unusual when searching for a life insurance policy, for an individual to receive a recommended policy from an agent, review the illustration to better understand the terms, sign the application, store the policy in a safe place and never look at it again.
Do not fall into this trap. Life insurance policies should be reviewed and analyzed every couple of years to ensure practicality.
It is recommended to check the following items every couple of years to ensure everything is up-to-date:
- Term length – does it need to be extended or shortened?
- Health status – contact your agent if it has improved
- Increase in income
- Change in beneficiary(ies)
- Any changes to personal information – change of address, contact information, occupation, etc.
In addition to fundamental changes to one’s policy, an insured should also look out for any changes their life insurance company has made. While insolvencies are rare among life insurance companies, it is still crucial to stay on top of any changes in company rating to guarantee that insurance proceeds will be paid out.
Want to learn more about life insurance? Read our article The Most Frequently Asked Life Insurance Questions.