How Often Should You Adjust Your Life Insurance Policy?

The whole point of life insurance is that you never know when you'll need it. So even though your policy might be long-term, you need to make sure it offers the right amount of benefits for your current situation.

A good rule of thumb is to recalculate your life insurance needs once a year, or more often if there's a major change in your life. Here are some examples:

The Things You Own

Whether you're married or single, it's good to know that your finances will be resolved if you should die unexpectedly. That could mean paying off loans or a mortgage, and it's especially important if you have a lot of debt or want your family to keep living in your home.

Take another look at your policy when:

• You buy or sell a home
• You take on new debt

Family Matters

You'll want to know that your family's financial needs will be covered if you're no longer able to provide for them. You'll need the most life insurance when your kids are growing-enough to last them until they become adults and cover their college education. This is even more important if you're the main breadwinner.

Consider raising or lowering your coverage when:

• You get married or divorced
• You have a baby
• Your children become financially independent
• Your children finish college
• Your long-term goals change

Work Life

The general rule for life insurance is that your policy's "death benefit" (the amount that gets paid to your beneficiaries if you die) should pay seven times your annual salary. The idea is that as your salary changes, your family's lifestyle changes to match. If you're self-employed or own a business, you might also have business-related expenses to cover.

Think about adjusting your policy when:

• Your salary changes
• You start or sell a business
• Your spouse's job changes

Make This Work for You ...in 15 minutes or less Choose a date to look over your life insurance policy each year, and mark it on your calendar ...in 1 hour or less  Look over your life insurance policy (or call your agent), and adjust your coverage if       needed ...in the long run  Make a habit of looking over your policy at each major life event

13AFS