If you’ve taken out a life insurance policy it’s tempting to cross this important task off your ‘to do’ list, put the paperwork somewhere safe and forget all about it.
However, if you don’t review your policy from time to time, you could risk being underinsured, or be missing out on a newer, more cost-effective policy that might better suit your needs.
So, here are a few life stages when it often makes sense to talk about protection insurance with your independent financial adviser.
GETTING MARRIED OR ENTERING A CIVIL PARTNERSHIP
If you’ve decided to share your lives, the chances are that you’ll also be sharing your wealth. This means that it’s important to make sure that if anything were to happen to either of you, there would be funds available to meet your financial commitments.
MOVING TO A BIGGER HOUSE
A larger home often means a bigger mortgage, so you need to consider taking out more protection insurance to cover the additional amount you’re borrowing.
HAVING MORE CHILDREN
If your family is growing, your financial responsibilities are likely to increase, and your cover will need to reflect this. It is often when families reach this stage that they find it’s appropriate to consider other forms of cover, such as accident, sickness and unemployment, critical illness or income protection.
YOU’VE GONE UP IN THE WORLD
If you’ve received a salary increase or promotion, your lifestyle might have changed too. Your children may be in private school, and your family may have got used to expensive holidays and meals out. If that’s the case, then it might be time to increase your cover, so that if anything were to happen to you, they could continue to enjoy a good standard of living.
At this time in life, a protection policy can help in Inheritance Tax planning, providing a payout on death that will help cover a tax liability on your estate.