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How To Review Your Life Insurance Policy

As your life changes, so do your insurance needs. Make sure your plan is keeping up with the times.


  • Step 1: Review your beneficiaries. If you've had a child, or if you have aging parents who are financially dependent on you, add them to the policy.
  • Step 2: If you've been diagnosed with a terminal illness, see if you can increase your coverage; some policies allow this without a new medical checkup. If you want money immediately, consider selling your policy to a private investment company; they'll pay you less than its face value but more than the cash surrender payout.
  • Step 3: Rest easy knowing that if something happens to you, your loved ones will be taken care of.
  • FACT: Did you know? On average, smokers pay 100 to 150 percent more for life insurance than nonsmokers.
  • Step 4: Decide if your coverage is still adequate by asking yourself how your premature death would financially impact the people in your life. A general rule is that you should carry a policy worth five to eight times your annual income.
  • TIP: Never cancel one life insurance policy until you have been approved for a new one.
  • Step 5: If you've done something to improve your health, like quit smoking or lost a substantial amount of weight, have your policy adjusted to reflect those changes. Healthy people pay lower premiums.
  • TIP: You have to be smoke-free for at least a year to be reclassified as a nonsmoker.
  • Step 6: No matter what kind of policy you own, research current rates on both term life insurance, which covers you for a set period of time, and permanent, which is ongoing and allows you to cash in your policy or take a loan out on it. You may be able to get a better deal.
  • Step 7: Review your policy every couple of years – more often if you've reached a milestone like marriage, kids, home ownership, or business ownership. Military personnel who are going to be deployed also should review their policies.

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