Most life insurance buyers in India buy a policy and then tend to forget about it. However, such an approach can be detrimental to your finances in the long run and defeat the purpose of buying the policy, which is to safeguard your family’s financial future.
A policy you may have purchased, say 5 or 10 years ago, may not provide you with the same coverage benefits to suit your current needs. This is why many insurance experts worldwide recommend the policyholders to review their policies every year during renewal. As you go through different life stages, your financial standing, responsibilities, liabilities may not be the same as it was a couple of years ago or even last year, for that matter.
One of the most significant benefits of reviewing your policy periodically is it helps you determine if the policy coverage is in line with your current financial situation/needs.
The policy coverage should change as your life situation changes
As you grow older, your life insurance needs may change too. And it is vital to address these changes and adjust the policy coverage accordingly. If you have not reviewed your policy for long, it would be best to do it today. Let us also discuss a few other situations when you must review your life insurance policy.
- When your family is growing
Getting married or becoming a parent is an important milestone event in life. While you celebrate the occasion, it also brings newer responsibilities. This means it is a good time to review your life insurance policy.
Marriage or having a baby means a new member gets added to your family. Considering this change in the family status, you must have enough life insurance cover to give your family enough financial cushion if something happens to you. The insurance cover must provide your family with enough funds to sustain themselves until they are financially independent.
- You have a new liability
When you start a new family, you may avail of a home loan. While you may be happy to move into your dream home, you must also realise that a home loan is a huge financial responsibility. Hence experts recommend buying a term plan for the same or more amount as your home loan amount.
Alternatively, you can review your existing plan to check if the coverage is enough to cover the mortgage and increase the cover accordingly. This way, you can be assured that your family does not have to bear the repayment burden in the event of your untimely demise.
- When you switch jobs or change your career path
Over a period, as you grow old, your income status may change for the better. You may get a promotion at work or a salary hike, and such changes in your finances call for a fresh insurance decision.
When you switch jobs or change careers, you must review your policy to see if the coverage is enough to help your loved ones maintain their current lifestyle and meet future expenses even in your absence. If you think the cover is not in line with your needs or is insufficient, you may increase the cover proportionately.
Final Word
One of the best ways to ensure sufficient insurance cover is to consult an expert who can guide you through the entire insurance review process. You can consult our team of expert advisors at Kotak Life Insurance by sending a simple Hi on our WhatsApp service 9321003007, and our advisor will get in touch with you immediately.
