Taking out a life insurance policy is a great first step in ensuring that those who depend on you would be taken care of financially if you were to die. However, over the years, your circumstances are likely to change, meaning that you may need to increase your life insurance, or take out a different type of policy to match your new needs.
Many people don’t think about reviewing their policy, but forgetting to do so could mean that your family won’t have enough money to pay the mortgage or meet the bills if you were to die. It could also mean that you’re paying more for your premiums than perhaps you need to, as there may now be more cost-effective policy options available to you.
Over the years, your life will change. For example, your family may grow, you might move to a bigger house with a larger mortgage, or you could find yourself taking on financial responsibility for ageing parents. All these life stages, and many more, bring with them the need to review the cover you have in place.
You may also want to think about additional forms of insurance that protect you against specific risks. One of these is critical illness cover which pays out if you are diagnosed with a serious illness. It’s a sad fact that a major illness can strike at any time. More than a thousand people are diagnosed with cancer every day, and every seven minutes someone has a heart attack.
Critical illness cover means that if you were to be diagnosed with a serious medical condition specified in your policy, you would receive a tax-free lump sum payment. No-one would want to be worrying about their financial responsibilities when they were seriously ill, so having this type of cover in place can provide valuable reassurance for you and your family. Many people buy a combined life and critical illness policy. In this case, a payment would be made on either diagnosis of a critical illness as defined in the policy, or death, whichever is the sooner.
If it’s been a while since you took out your existing policies, now could be a good time to arrange a review to ensure you have the cover in place that meets your needs.