Top Life Events That Call for a Term Life Insurance Review

Life is full of twists and turns, and with every major milestone, your financial responsibilities evolve. While term life insurance is a great way to secure your family’s financial future, it’s not a "set-it-and-forget-it" kind of deal. 

Regularly reviewing your policy ensures that it keeps pace with your changing needs, protecting your loved ones when they need it most.

Let’s dive into the top life events that should prompt you to review your term life insurance policy, ensuring you’re always one step ahead of life’s surprises.

1. Getting Married: New Life, New Responsibilities

Marriage brings joy, love, and a whole new level of financial commitment. As you start building a life together, your financial responsibilities often grow. From shared expenses like rent or a mortgage to long-term plans like children’s education, it’s important to revisit your term life insurance policy to ensure your partner is financially protected.

Example:

When Arjun and Priya got married, they updated Arjun’s policy to include Priya as the beneficiary. Arjun also increased his coverage to ensure that his wife wouldn’t face financial stress in his absence.

2. Welcoming a Child: Securing Their Future

Becoming a parent is one of life’s most rewarding experiences—and also one of the most financially demanding. From diapers to college tuition, the costs of raising a child can add up quickly. A term life insurance review helps ensure that your coverage is sufficient to meet your growing family’s needs.

Example:

After the birth of their daughter, Neha and Karan reviewed Karan’s policy. They increased the sum assured to cover their child’s future education and living expenses in case anything happened to Karan.

3. Buying a New Home: Protecting Your Biggest Investment

Purchasing a home is a significant financial milestone that often comes with a long-term loan. A term life insurance review ensures that your family isn’t burdened with mortgage payments if something happens to you. Adjusting your coverage to match the loan amount is a smart way to safeguard your home.

Example:

Ravi took out a 20-year home loan and updated his term life insurance to match the loan tenure and amount, ensuring his family wouldn’t have to worry about repaying the mortgage.

4. Job Change or Salary Increase: Adjusting to a New Income Level

A career change or a significant salary hike is a great time to reassess your term life insurance. With an increase in income often comes a lifestyle upgrade, and your policy should reflect those changes. 

Whether it’s higher living expenses, new investments, or bigger savings goals, updating your coverage ensures that your loved ones can maintain their current standard of living.

Example:

After landing a high-paying job, Shweta reviewed her policy to align it with her new financial responsibilities, including higher savings targets and family vacations.

5. Starting a Business: Protecting Your Venture

If you’ve taken the entrepreneurial plunge, congratulations! However, starting a business often comes with financial risks, including loans and investments. A term life insurance review can help protect your business and family from financial instability if the unexpected happens.

Example:

Ajay started a small tech firm and took out a loan to fund his startup. He increased his term life insurance coverage to ensure that his family wouldn’t be left with the business debt.

6. Health Changes: Adapting to New Realities

A significant change in your health, such as being diagnosed with a chronic condition or recovering from a serious illness, can affect your financial outlook.

While term life insurance policies typically don’t cover pre-existing conditions, reviewing your coverage ensures that your family has adequate financial support for future uncertainties.

Example:

After recovering from a major surgery, Manish reviewed his policy to ensure his family was financially secure in case of a relapse.

7. Nearing Policy Expiry: Planning Ahead

If your term life insurance policy is nearing its expiry date, it’s time to review your coverage and decide on the next steps. Depending on your age and financial situation, you might choose to renew your policy, switch to a new one, or explore other options like whole life insurance.

Example:

At age 50, Sunil’s 20-year policy was about to expire. After reviewing his financial status and future goals, he opted for a new policy to provide continued coverage for his wife.

Conclusion

Life is unpredictable, and as your circumstances change, so do your financial needs. Reviewing your term life insurance policy during major life events ensures that your loved ones are always protected, no matter what life throws your way. 

Whether it’s tying the knot, welcoming a child, or buying a new home, keeping your coverage updated is essential for peace of mind. 

As an insurance aggregator in India, Digibima makes it easy to compare and review term life insurance policies. Whether you’re buying your first policy or updating an existing one, Digibima provides personalized options to match your needs and milestones.

FAQ Section

Q1: How often should I review my term life insurance policy?

A1: You should review your policy whenever a major life event occurs, such as marriage, the birth of a child, or buying a home. Otherwise, an annual review is a good practice.

Q2: Can I increase my coverage amount during the policy term?

A2: Many insurers offering Term Life Insurance allow policyholders to increase their coverage during the policy term. However, this may require additional premiums and, in some cases, a health check.

Q3: What happens if I don’t review my policy?

A3: If you don’t review your policy, your coverage may not align with your current financial needs, leaving your family underinsured in case of an emergency.

Q4: Can I change my beneficiary after the policy is active?

A4: Yes, most Term Life Insurance policies allow policyholders to update their beneficiary details at any time by contacting their insurer.

Q5: Does a salary increase always require a policy review?

A5: Not necessarily. However, if your financial responsibilities or lifestyle significantly change due to the salary increase, it’s wise to review your policy.