It is quite likely that you already have term insurance. Maybe, you took a term plan a few years ago, and since you pay your premium on time, you think that you do not really need to give much thought to it. After all, you live a busy life, and what is there to think of, really, once you have term insurance by your side.Signs when you should upgrade your Term Coverage #Insurance Click To Tweet
If this is the way you think, it is time to pause and think again. Life insurance, or term insurance, is not something that is static. It needs a review from time to time. Your life realities change as the years pass, which means your need for term insurance also changes. It is always wise to revisit your term plan coverage once something major happens in your life. Here’s a look at five signs telling you to upgrade your term insurance.
You were smart enough to buy term insurance the moment you got a job. That was a wise decision. And then you got married. Now you are responsible not just for yourself, but also your spouse. You have to secure your future and that of your partner as well. Marriage is a surefire sign that it is time to buy additional life cover. Sit with your spouse and take a serious look at your life insurance policies. In all probability, you will feel the need to take a new policy or supplement the existing ones.
2. Becoming a Parent
Once you have children, your expenses will rise. A growing family means more demands on your earnings. The cost of raising children is quite sizeable in today’s times; you do not just need to provide education and healthcare to your little ones, but also enrol them in a host of activities – the swimming classes, tennis lessons, music, dance training, and so forth. It is your responsibility to ensure that should your spouse be left alone to deal with the situation, s/he does not feel the financial pinch. So, go ahead and upgrade your term coverage once you have children.
3. Buying a Home
When you buy a new home, you need to reconsider your term plan cover. You should be able to cover your mortgage debt and be able to pay for your home expenses. Once you take more debt, you also need to be able to pay it off in the years to come. You would not want your family to be pushed out of your home just because they are not able to pay the EMIs. So, update your term plan in accordance with your changed circumstances and enjoy your new home.
4. Increase in Income
Once your income increases, it brings a change in your overall life. Your lifestyle improves, you spend more on comforts, and even on luxuries, you take more vacations and more expensive holidays, you buy branded and expensive clothes, you give costly gifts to friends and family. And you get used to a certain way of living. Once this happens, it should ring a bell in your head that it is time to go for a larger life cover.
You might have bought your life insurance policy sometime back when your life reality was different. But now you are spending more, and there might be a gap in your term insurance coverage and the needs of your family. So, do the right thing and expand your life cover.
5. Change in Beneficiary
Sometimes, unexpected things happen in life. For instance, you and your partner may decide to separate. This would change many things in your life. In case you had named your spouse as the beneficiary of your term insurance policy, you might want to make a change. Suppose you now want to make your children the beneficiaries. That would necessitate an upgrade in your term coverage. Your earlier policy might have given certain proceeds to your spouse that might have been adequate for him/her, but those amounts may not be enough for your children. In that scenario, you might want a bigger life cover that gives enough security to your children.
Concluding, Revisiting your term coverage and upgrading it, whenever necessary, is always a good idea. Reputed insurers like Future Generali provide you with the option to increase your term plan cover at major milestones of your life. However, remember that your term coverage should reflect your current, as well as projected, lifestyle. So, never hesitate to buy additional cover; it might serve your family at a critical time.
Featured Image source – Shutterstock
Get Drishtikone Updates
in your inbox
Subscribe to Drishtikone updates and get interesting stuff and updates to your email inbox.
Thank you for subscribing.
Something went wrong.