5 signs you need to adjust your life insurance

The right life insurance plan can bring peace of mind for both the policyholder and beneficiaries such as family members and loved ones.

When you have a life insurance policy, you make regular payments over time to an insurance company or an employer. People you designate as beneficiaries receive an agreed-upon sum upon your death.

If you're in the market for life insurance - or want to boost the coverage you already have - then speak with a life insurance professional now who can help you get started with a free quote.

5 signs you need to adjust your life insurance coverage

As you embark on the life insurance search it helps to understand what you need and how to get there. Here are five signs you need to fix your policy or plans.

You only have coverage through your employer

Employers tend to provide life insurance that's one to two times a worker's annual salary - usually at a low cost or even for free. While that's a nice benefit, the amount of coverage may not make up for the income your family depends on to pay the bills - or will need for your outstanding debt should you die.

Add up monthly expenses like mortgage payments and bills, then consider your long-term debt obligations. If your employer-provided plan won't cover those needs, you'll want to explore adding to your life insurance coverage.

Remember, employer-provided policies often terminate if you leave or lose your job. An additional life insurance policy can help fill that gap.

You don't have enough coverage

While having a life insurance policy can be a good idea, inadequate coverage may leave your beneficiaries in a bind. Changes in health, employment, family status or your overall financial picture may mean you need to consider more life insurance coverage.

Do the math. If your savings, property and other assets don't cover obligations including long-term loans like a mortgage, you may want to add to your existing policy or take out additional life insurance to close that gap.If you recently purchased a policy and find it inadequate, your current insurance company may be able to expand the policy's coverage.

Speak with a life insurance expert now who can help you expand your coverage.

You bought the wrong type of policy

Choosing an insurance policy can be complex. If your life's circumstances shift, the type of life insurance policy you carry should too.  For example, if you felt a whole life policy fit your needs when you purchased it but now find the premium is too high for your current budget, you can cash out and switch to a less expensive term policy.

That may help you prevent a missed payment, lapsed policy or lost coverage. Though term life insurance policies expire by a set date, coverage tends to be less expensive.

Do your research to discover the right policy for your circumstances.

You have too much coverage

It is possible to have too much coverage, experts say.For instance, you may be healthy but pay a monthly premium for a higher-priced policy that doesn't require a medical exam.

Or, your children or dependents have left the household, but you're still carrying insurance designed to cover the expenses of a growing family.

Perhaps you've paid off a mortgage and your beneficiaries no longer need to cover the monthly payments when you pass away.

It's nice to think about leaving a big inheritance for your beneficiaries in these circumstances. But consider if you can or want to keep making higher premium payments for such a disproportionate payout. Remember, a life insurance premium you can't afford won't help your beneficiaries if the policy lapses and the payout becomes zero.

Your beneficiaries change

You'll want to make sure a life insurance policy pays the people you want it to pay upon your death, and keep that list updated. Most life insurance companies will allow you to change your beneficiaries by submitting a written request.

Most insurance firms allow you to name contingent, or secondary, beneficiaries in your policy in the event your primary, or principal beneficiary, dies. Be specific and assign a percentage to each beneficiary if your policy names more than one.

Evaluate your life insurance coverage when circumstances change. New circumstances might include birth, divorce, marriage, home purchase, death or a new job.

If you're not sure what your life insurance policy covers, it may be helpful to review it sooner rather than later.  A life insurance expert can help you get started today!

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