A general annual review is advisable to see if your insurance is up to date and whether you can still afford it. However, a general rule of thumb is that you should always update your policy whenever you have big life change such as getting married, having a baby, or buying a house. Here is more on what you need to know when it comes to reviewing your life insurance.
You are getting married or divorced
Speaking about marriage and divorce in one breath is a bittersweet reality that many South Africans face. With 4 out of 10 marriages ending in divorce before reaching their 10th anniversary, life insurance is the last thing many couples forget to amend.
Craig Baker, CEO of MiWayLife, adds that “remember that taking out life cover when you are married is crucial to protecting your partner and your loved one’s financial future. You can also amend it should you get a divorce. The choice is yours on whether you would like to keep your partner listed or removed as one of your beneficiaries.”
You are planning on having children
Any parent wants to make sure that they can provide for their child in every possible way. More so, when it comes to protection for their financial future. Reviewing your life insurance to ensure that your child is listed as a beneficiary is one of the ways that you can leave them a financial legacy. You can always review your policy to add more children if you are planning on having more than one child. Find out how you can update your beneficiary(s) here.
Changes in your career
The underwriting process is where life insurers find out if you are high risk and if they will be able to give you cover. One of the things that insurers look at is your occupation. Someone who holds an office job is low risk compared to someone who works in mining or cleans the windows of a high rise building for a living.
“You still may receive cover if you have an occupation that is considered high risk, but your premiums will be higher. However, should you switch occupations to one that is a low risk you can always ask your insurer to review your policy to lower your premiums,” adds Baker.
Change in your lifestyle habits
Lifestyle habits such as participating in high-risk hobbies, smoking, excessive drinking, and unhealthy diets can put your life at higher risk compared to someone who does not participate in these lifestyle habits. When it comes to putting your best foot forward and saving on your policy Baker points out “changing the lifestyle habits that put your health at risk can give you a chance to ask your life insurer to review your premiums. Insurers do assess on an individual basis which means in some cases they may require medical proof.”
Purchasing a home
Having life cover before you go house hunting can make the process of securing a home loan swing in your favour. You can use your life cover as surety to ensure that your mortgage is paid off should you die. It also eases the burden for your loved ones of having to stress over any debt you may have accumulated.
Updating your beneficiary list
Reviewing your life insurance to update your beneficiary list is crucial. Doing this will make sure that the right people receive the payout from your life cover. Furthermore, it will help you avoid situations where your life insurance payout remains unclaimed. Should you not have any beneficiaries you can list you can always opt to have your payout donated to a charity of your choice.
*SD Law, aka Simon Dippenaar & Associates Inc., is a law firm in Cape Town, of specialised divorce lawyers offering divorce and family services across the country. Contact us for help today on +27 (0) 86 099 5146 or by email firstname.lastname@example.org.