Life insurance is not something you should set up once and forget about. Life changes constantly — you might switch jobs, buy a house, grow your family, or experience shifts in your health or finances. Because of this, it’s important to revisit your life insurance policy each year to make sure it still matches your current situation and continues to protect the people who rely on you.
Here’s why an annual policy review should be part of your financial routine.
Career Changes Can Affect Your Coverage
A new job or a promotion often means an increase in income, which can also lead to higher expenses and financial commitments. Reviewing your life insurance after a career change helps ensure that the payout your family would receive is still enough to cover their needs.
The same principle applies if you’re nearing retirement or have already retired. Your priorities may shift from income replacement to covering final expenses, paying off debts, or leaving an inheritance.
If your coverage is provided by your employer, reviewing it is even more important. Most group policies end when you leave the job, so you may need to secure an individual policy to maintain protection.
New Business Ventures Change Your Financial Picture
Starting a business brings new responsibilities, potential debts, and financial risks. Life insurance can help protect your family and your business if something happens to you. It can also play a role in succession planning or ensuring your business assets are distributed fairly among your beneficiaries.
Keep Your Beneficiary List Up to Date
Your life insurance is meant to provide financial support to the people you care about, but those people may change over time. Review your beneficiary list each year to make sure it still reflects your wishes.
For example, you might want to remove an ex-spouse after a divorce or add a child who has just reached adulthood. You should also consider how each beneficiary will receive the payout based on their circumstances, and make sure they’re aware of the policy so there are no surprises later.
Marriage or Divorce Calls for a Policy Update
Changes in your marital status are key reasons to review your life insurance.
If you’ve recently married, you may have new shared financial responsibilities, such as rent, a mortgage, or future plans together. Ensuring your spouse is financially protected can provide peace of mind.
Conversely, if you’re divorced, updating your policy helps guarantee that the death benefit goes to your children or chosen beneficiaries rather than your former spouse.
Expanding Your Family Increases Financial Needs
Welcoming a new child — through birth or adoption — is one of the most significant reasons to revisit your coverage. Children bring additional expenses, from childcare and daily living costs to education and healthcare. Adjusting your policy ensures that your family can maintain their lifestyle and meet long-term financial goals if you’re no longer there.
Homeownership Changes Your Coverage Needs
Buying a home is a major financial commitment, and your life insurance should reflect that. If something were to happen to you, would your family be able to afford the mortgage on a single income? Increasing your coverage can help ensure they won’t have to sell the home or relocate during an already difficult time.
Likewise, if you’ve paid off your mortgage or refinanced, it’s still a good idea to review your policy and adjust it as needed.
Health Changes Can Impact Your Policy
Your health is another factor that should prompt a review. A serious diagnosis might mean you need more coverage to support your family, while significant improvements — like quitting smoking or losing weight — could qualify you for lower premiums. Reviewing your policy after any health change helps keep it aligned with your circumstances.
What to Check During Your Annual Review
When you sit down to review your policy, make sure you:
- Confirm that the death benefit is enough to cover your family’s current financial needs.
- Update your list of beneficiaries if necessary.
- Evaluate whether your policy type still suits your goals.
- Ensure premium payments are affordable and sustainable.
- Check that your policy is in good standing and not at risk of lapsing.
- Explore any new coverage options your insurer may offer.
Working with a licensed insurance professional can make this process easier and help you make informed decisions about your coverage.
Final Thoughts
Life doesn’t stand still — and neither should your life insurance. By reviewing your policy every year, you can be confident that it’s still doing what it’s meant to do: protecting your loved ones and securing their financial future, no matter how your life changes.
