5 events that should trigger a life insurance examination

In recent weeks I have received a number of questions from readers of my blog requesting to replace their life insurance. Jim asked to change his whole life policy because it could no longer afford it. I have another email from Nancy. Because her husband died, she wondered if she needed to raise her existing coverage. The circumstances surrounding these individuals are different, of course. But there are distinct life events that should trigger a review of your life insurance

Here are the top 5 events :.

1. Births, deaths, marriages and divorces: Whenever there is a major life event in your family, it makes sense to review your insurance coverage -life. Indeed, these changes generally alter the reality of your finances big time. In the example above, when Nancy's husband died, she suddenly became responsible for all the family. Although she is in her 50 years, she has absolutely need more life insurance.

Keep in mind that in both directions. For example, when your children become independent, your costs are low and you might not need as much life insurance. Similarly, if your spouse gets a great job, it could also reduce your need for life insurance.

2. Change in Financial Position: In the introduction, I mentioned Jim. He lost his job and cover life insurance, too. On top of that, he did not have the income to keep premiums at its existing coverage. So he needed more assurance, but he also needs to reduce its premiums. He spends the term whole life to achieve both objectives. In his case, he really had no alternative.

But other changes in your financial situation could mean that you need less life insurance. If you sell a property or business for example, you could suddenly have so much cash that you really do not need life insurance.

3. Retirement: If your retirement plan works, you have enough money to retire passive income generated by investments and pensions. Depending on your situation, this could mean that you no longer need life insurance. On the other hand, if your spouse would not be enough to income if you were to disappear after you retire, you may need life insurance.

4. Tax Changes right: At present, very few people need to worry about estate taxes, but that could change at any time. If you end up having a taxable estate, life insurance is a great way to solve this problem.

5. Every two years: If you read between the lines, you can see that many of these trigger events are impossible to predict. And even if you know something will happen, you can not guarantee that you will be insurable when they do.

This is why the most important trigger is the time. Insurance is designed to protect your family against possible future risks. Nobody is going to sell you a life insurance when you are in an ambulance or lying in a hospital bed. Sure, you can buy a life insurance without physical, but there are limits. That is why it is important to have the right cover in place against foreseeable risks. By all means, if one of these triggering events that happen to you, reevaluate your life insurance coverage. But even better, reassess your requirements every two years just to be on the safe side.