Why You Should Think Twice Before Replacing Your Life Insurance
Considering replacing your life insurance policy? There are many questions you should ask yourself before making this decision, such as: Are you looking for lower life insurance premiums? Does your policy still offer enough protection for your family? Have your needs really changed? Even if youíre happy with your life insurance policy, itís important to regularly review your coverage in relation to your current and future needs. After all, the role of life insurance may change over time, and your policy may remain a valuable asset for years to come.
After reviewing your needs on your own or with a Financial Professional, you may determine that you need different coverage ó maybe more, maybe less. But if youíre thinking about replacing your policy, think twice and take the following into consideration.
Take Another Look at Your Current Policy
There are many reasons people consider cancelling their life insurance, but there are often just as many reasons to keep it. So before you start exploring a new policy, itís a good idea to learn how your current policy works and what options may be available. For example:
Consider Your Personal Situation
Thereís no way around it: Youíre older than you were when you purchased your policy.
Insurance companies use age as a key factor when determining the cost of your coverage. Generally speaking: older = higher premiums. The same goes for any health changes. Remember, a new insurance company will most likely require you to take new medical tests. So if your health has worsened over the years, your premiums may be higher.
You should also consider your financial status. Chances are your net worth has increased over time. Maybe you received a promotion or landed a big business deal. Perhaps youíve purchased real estate. If youíre worth more now than before, getting more insurance may be a smart decision. Yet you donít necessarily need to cancel and replace what you have with a larger policy. It may make more sense to simply add a second policy to your existing coverage.
Take a Closer Look at the New Policy
If you have chosen to replace your policy, be sure to evaluate your decision. Before you sign on the dotted line, remember that the grass isnít always greener on the other side ó especially once you bend down and get a close look.
If youíve met with a new insurance agent, he or she may have shown you charts and figures illustrating different levels of protection ó in some cases, maybe even greater protection and higher cash value. But you really should dive deeper and compare those numbers to your existing policy. Review your personal situation to make sure the new policy meets your needs and that you understand the consequences of replacing a policy. Some things to consider:
Take the Right Step for You
If you think your life insurance needs are different today than they were yesterday, itís time to talk to a financial professional about your options. Then youíll be prepared to make a decision thatís right for you today ó and tomorrow.CRN201903-208966