When purchasing a life insurance policy, or any policy for that matter, people tend to overlook its true potential. Life insurance isn’t just a financial product to tick off the list; it is a critical step to proper financial planning and security. By collecting and analysing details on our financial situation, employment, spending, living expenses, and other future costs, we can develop a plan that works for us in a plethora of ways.
For instance, you can ensure the payment benefit is more than enough to support your family, but you can also ensure it covers up to 70% of your income if you are ever unable to work due to an accident or illness.
By taking the time to gather the facts, you can tailor a policy that aligns with all your financial needs, giving you unbelievable peace of mind. Hopefully, this guide will help you make the first steps towards optimising your policy and achieving ultimate financial security.
The Importance of Reviewing Your Policy
Something that many forget to do once they have invested in a life insurance policy is to review it. We understand that this might seem like a long, drawn-out, and even unnecessary process, but it definitely isn’t.
Every time you encounter a significant life-changing moment, such as having a new child, purchasing a home, or starting a business, it is essential to make adjustments to your benefit amount to ensure it will still do what you need it to. For example, a new child will incur future education costs that need to be taken into consideration.
How a Careful Self-Assessment Can Give Us the Best Deal
Carefully assessing your current and future situation will enable you to choose a benefit amount and other coverage options that align with the needs of your family. During this process, you should calculate the following:
Your financial commitment – Calculate all your outgoings, mortgage payments, and other financial obligations, taking into account when they will be fully paid and when they might increase.
How many years of income will be enough? – Depending on savings, predicted savings, and current income/daily living expenses, you will need to work out precisely how many years’ income your loved ones will need from the benefit amount.
What are the future education costs for your children? – If you want your children to go to university but don’t have money put aside for it, this is an essential cost to include in your benefit amount.
What debts do you have, and when will they be paid? – The last thing we want is to pass our debt onto the ones we love, so ensure this is also covered in the benefit amount.
Your current health – Carefully assess your current health to figure out what add-ons and inclusions you need with your life insurance policy.
Your lifestyle and employment – If there are any risks with your current employment, or you feel it isn’t the most secure, this will help when choosing additional inclusions. This means your life insurance can even provide coverage while you’re still around.
Additional Ways to Optimise Your Life Insurance Policy
There are specific things you can do to ensure your life insurance policy will give you absolute peace of mind and cover you in numerous unexpected situations. It is essential to look for ways to bundle your policy with others. This can provide financial security if you are ever unable to work.
Bundling policies will also save you a significant amount on premiums if you currently have multiple policies. Another way to pay less is to pay annually. Doing this means that you aren’t burdened with monthly payments and will also save you a pretty penny. Taking all of this into consideration is sure to give you the best life insurance policy you could imagine. With a bit of planning, you will never fall short.
Achieve Peace of Mind by Taking the Time
By taking the time to review our life insurance policy and thoroughly assessing our personal situation, we can achieve immeasurable peace of mind. Thankfully, the process doesn’t take as long as you might think, and once you do it, you will instantly begin to feel the benefits.