Give Your Life Insurance a Checkup – Insurance Policy Review Checklist
As our body needs a regular check up, insurance policies should also review time from time. Plans also need a change of our lifestyle. Many times happen that when a person bought insurance, it seems useful but over a period of time, it may seem useless. Here we discuss on Insurance policy review checklist.
If family members are financially healthy, a person might not need whole life insurance. There are two circumstances for a not requirement of life insurance. First, is when kids are out of the house and person is either single or his spouse’s income can support after retirement and second, is when a person get retirement.
Besides this, it may possible that after some years after financial condition changed, a person may need life insurance policy. It may also happen that he already has a policy but it does not have sufficient coverage. In that case, he can buy an additional policy or replace it with new one or a big one. Buying an extra policy may increase a cost of premium so instead of buying an extra policy, add more coverage through a group policy is a great and cheaper option.
Many websites provide a special calculator through its websites to calculate how much life insurance a person needs. Among all of those formulas, a simple one is to multiply after tax income by the number of years family will need to replace income.
In term life insurance, one needs to pay an annual premium which gives benefit after the death of policy holder. Most of the policies are for 5 or 10 or 15 or 20 years. The period cannot be extended at an original rate once it issued. There is no need to pay a premium if a person is sure that he does not want insurance anymore.
Cash value insurance is little different type policy and it includes whole life, universal life, and variable life insurance. All of these are attached to investment account- cash value. These policies can become a source of income under the following option:
- Surrender life insurance plan with an insurer and he will give cash value.
- A person can also take a loan against cash value which will be paid from the benefit amount after policy holder’s death.
- Transfer the amount of insurance to an annuity that will provide income for a long time.
- A person may buy a small paid-up policy from the cash value. This will give benefit to his spouse or family after death.
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