Life insurance is an important component of any financial strategy, and we recommend it to most of our expatriate clients. However, because people’s lives change, you can’t just buy a policy and forget about it. We examine why and how you should evaluate your life insurance coverage.
Expats must get life insurance
Life insurance is one of the foundations of any financial strategy, giving financial security and safety to your loved ones in the event of your death. In the event of your untimely death, life insurance assures that your family is financially secure and is not forced to make lifestyle sacrifices. A life insurance pay-out can be used to pay off debts, mortgage payments, education expenditures, and funeral expenses, as well as to maintain living standards.
It can also be used as an estate planning tool to conserve wealth and assets for future generations, allowing for the tax-efficient transfer of financial resources.
What exactly is a life insurance evaluation?This is a simple process that can be carried out with the assistance of your financial consultant to ensure that the life insurance policy you have in place is still appropriate and meets your needs. They will do the following during the review:
- Make sure you have enough insurance to meet your financial commitments.
- Make sure your beneficiaries are up-to-date and represent your current desires.
- Evaluate the performance of any policy investment components.
- Examine premiums to ensure they are affordable.
- Examine your policy’s terms and conditions, including exclusions and optional benefits.
- Compare your policy to others on the market to verify you’re getting the best deal in terms of coverage, features, and price.
Why should I examine my life insurance policy?
Financial obligations alter and change as people’s lifestyles change. By reviewing your life insurance policy on a regular basis, you can ensure that it remains relevant, matches your changing needs, and continues to offer essential financial security for your loved ones in the future.
It is best to seek the advice of a qualified insurance specialist who can help you through the review process and make expert recommendations based on your individual circumstances.
Following the evaluation, your consultant will provide recommendations on whether you should revise or change your policy, expand your coverage, change the beneficiary, or consider other options.
How frequently should I go through my life insurance policy?
Even if your life is boring, we recommend a life insurance review at least once a year. Certain life occurrences, on the other hand, need a reassessment.
When should I have my life insurance policy reviewed?
When you get married
Singletons may not require life insurance (though we typically recommend it), but once you have a spouse who relies on your income, it is critical to buy life insurance to cover them if you die unexpectedly.
When you have kids
For many people, this is the most important factor to consider when purchasing life insurance. You should take out insurance to help pay all your children’s current and future expenses (including childcare, school fees, and university tuition) if you are no longer available to be the family earner.
When your children reach the age of majority
Although many families continue to use life insurance as a tax-efficient estate planning tool to pass on assets once their children reach adulthood, the need to safeguard them with life insurance may shrink. Life insurance is also frequently used to provide liquid assets in the case of a death to pay death taxes, funeral fees, and other immediate bills that must be handled before probate (a potentially lengthy process) is granted.
When you reach retirement age
If you retire debt-free and have a steady source of income, life insurance may be unnecessary; nonetheless, many people use the cash value of their life insurance policies to cover expenses once they stop working.
When the names of your beneficiaries change
It is critical to keep the beneficiary or beneficiaries of your life insurance policy up to date. If a beneficiary dies, their place must be filled. Similarly, if you divorce or have a child, you may want to add or remove a beneficiary.
If your revenue fluctuates
A promotion and a rise in salary may result in an increase in your daily expenses. You might, for example, agree to a bigger mortgage or more expensive schools for your children. These changes have an influence on your life insurance needs, so you should assess them.
How to Obtain Assistance in Reviewing Your Life Insurance
It’s not always easy to determine your life insurance needs, but our financial consultants have the knowledge and experience to educate you and guarantee that your coverage is suitable for your needs, providing you with peace of mind.