As many of you know, I personally ended up buying a term life insurance policy. and while I still have quite a few years left on my policy, I had an interesting discussion with my uncle about what to do when a term life insurance policy is coming up for renewal. The first question of course is how to know. Yes, ideally you can set yourself some kind of reminder while you do your annual insurance review. Why? Because the worst thing that could happen is for you to have something bad happen while you have no current life policy.
Your Insurance Company Will Be On You
While the end responsibility is on you and I to remember to renew such a policy, there is no doubt that in 95%of cases, the company that issued you the policy will reach out to try to sell you a new one. It’s certainly worth hearing them out. But don’t make a big mistake. Hear the company’s offer but then you need to do your own homework. What do I mean?
–Revaluing Your Needs: Chances are that your circumstances will have changed significantly since buying that first policy. For that reason, it’s very important to look back at your situation, both financial (debts, income, liabilities, etc) and personal (kids, projects, etc) in order to determine how much coverage you need and if you should look for term insurance or whole life.
–Shopping As If You Were Buying A New One: Once you know your needs, don’t just renew with your initial company’s offer. Yes, it’s the easiest and most convenient but you could end up paying thousands of dollars more because of that…shop, use a broker, do whatever you can to get the best deal possible.