How To Review And Update Your Life Insurance Plan: Smart Adjustments For Every Stage Of Life

Having life insurance is a significant step toward protecting your loved ones. If you already have a policy, you’ve made a commendable commitment to securing their future. However, life changes—and so do your financial needs. That’s why it’s important to review your life insurance periodically to ensure it still aligns with your goals.
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Here are key areas to examine and actions you can take when reviewing your life insurance policy:

1. Revisit and Update Your Beneficiaries
Life events such as marriage, divorce, the birth of a child, or the death of a loved one should prompt an immediate review of your policy’s beneficiaries.

What to do:

• Update your beneficiary designation by completing a form with your insurance provider.
• Avoid naming minors directly. Instead, designate a trusted adult or set up a trust.
• Refrain from naming your estate as the beneficiary. This can subject the death benefit to probate delays and potential creditors.

Tip: Review your beneficiary designations annually, even if no major life event has occurred.


2. Consider Monetizing a Permanent Life Insurance Policy
If you have a whole life or universal life insurance policy with cash value, you may be able to access or withdraw funds if your financial situation changes.

When to consider cashing out:

• The policy has built a substantial cash value.
• You no longer need coverage or your beneficiaries have become financially independent.
• There are no surrender fees or they have significantly decreased.
• You’ve evaluated the tax implications and are comfortable with the impact.

Downside: Once cashed out, the death benefit will no longer be paid to your beneficiaries.


3. Explore Selling Your Policy (Life Settlement)
A life settlement allows you to sell your policy to a third party for more than the cash surrender value but less than the death benefit.
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Before selling, consider:

• Consulting with a financial advisor or insurance professional.
• Understanding that the buyer becomes the policy owner and beneficiary.
• Ensuring the transaction is legitimate and in your best financial interest.

Life settlements are typically only available to older adults or those with declining health who have permanent policies.


4. Evaluate the Need for Additional Coverage
Your financial responsibilities may grow over time (e.g., children, mortgage, debts). If so, your current coverage might not be enough.

Options:

• Buy an additional life insurance policy to increase overall coverage.
• Check for a guaranteed insurability rider in your existing policy, which may let you increase coverage without a new medical exam.

Cost considerations:
Additional premiums will be based on your age, health at policy start, and the amount of added coverage.


5. Convert Term Life Insurance to Permanent Coverage
If you have a term life policy, you may be eligible to convert it to a permanent policy such as whole life or universal life.

Important notes:

• Most term policies have a conversion window—don’t miss the deadline.
• Converting allows you to lock in lifelong coverage without a new medical exam.
• Permanent policies build cash value and can serve as a long-term financial asset.

6. Schedule Regular Life Insurance Reviews
Just as you would revisit your financial goals or estate plan, your life insurance should be reviewed on a regular basis—ideally every 1–2 years or after major milestones.

Key times to review:

• Getting married or divorced
• Having or adopting a child
• Buying a home or taking on new debt
• Receiving a diagnosis or undergoing a major health change
• Retirement or changes in financial dependency

Final Thoughts: Plan Today, Protect Tomorrow
Your life insurance policy isn’t just a one-time purchase—it’s a living part of your financial planning. Make it a habit to reassess your needs and adjust your coverage to reflect your evolving life. By staying proactive, you ensure that your policy continues to serve its primary purpose: protecting the people you love.

At Insurance Agency Network, we aim to provide comprehensive insurance policies that make your life easier. We want to help you get insurance that fits your needs. You can get more information about our products and services by calling our agency at (425) 448-9190. Get your free quote today by CLICKING HERE.

Disclaimer: The information presented in this blog is intended for informational purposes only and should not be considered as professional advice. It is crucial to consult with a qualified insurance agent or professional for personalized advice tailored to your specific circumstances. They can provide expert guidance and help you make informed decisions regarding your insurance needs.