Reviewing Your Life Insurance Needs for 2025
December 12, 2024
You may have gotten your life insurance years ago, but as we approach 2025, reassessing your coverage becomes crucial. Life changes rapidly, and your insurance needs evolve with it. Whether you've experienced major life changes or simply want to ensure your policy aligns with your current financial goals, now is the perfect time to review your life insurance needs.
Why Review Your Life Insurance Annually?
According to recent statistics, 22% of life insurance owners believe they do not have adequate coverage, hence the need. Also, life is dynamic, and your insurance needs should reflect that. Annual reviews help ensure your coverage remains adequate and aligned with your current situation.
Changing Financial Obligations
Your financial responsibilities can shift dramatically over time. New debts, changes in income, or additional financial commitments can all impact your life insurance needs. For instance, if you've recently taken on a larger mortgage or started a business, you may need to increase your coverage to ensure your family's financial security.
Life Events
Major life events often necessitate a review of your life insurance coverage. Marriage, the birth of a child, or purchasing a home are all significant milestones that can affect your insurance needs. These events may require you to adjust your policy to provide adequate protection for your growing family or new assets.
Assessing Your Current Coverage
Evaluating your current life insurance policy is a crucial step in ensuring it meets your evolving needs. Let's examine two key aspects of policy assessment.
Adequacy of Current Policy
Evaluating whether your current policy's face value sufficiently covers all your financial needs and debts is crucial. A comprehensive review should consider factors such as:
- Outstanding mortgage or rent payments
- Future education expenses for children
- Ongoing living expenses for your family
- Any outstanding debts or loans
Performance of Investment Components
For those with universal or whole life policies, it's essential to assess the performance of your policy's investment components. As we move into 2025, economic conditions may affect these investments. Review your policy's cash-value growth and compare it to your initial projections to ensure it aligns with your financial goals.
Adjusting Your Life Insurance for 2025
As we approach 2025, you might find that your current life insurance policy needs adjustments to better suit your changing circumstances.
Increasing Coverage
You may find that you need to increase your coverage. This could be due to:
- Having more dependents
- Moving to a higher cost-of-living area
- Taking on additional financial responsibilities
Consider whether your current policy provides enough protection for your family's future needs, especially if your circumstances have changed significantly since you first purchased the policy.
Switching Policies
Sometimes, switching from term to permanent insurance, or vice versa, may be beneficial based on new long-term financial strategies. For instance, you may have initially chosen a term policy but now desire lifelong coverage or cash-value accumulation. In this case, converting to a whole life policy might be appropriate.
Planning for Future Changes
To have the best insurance policy, you need to consider:
Future Financial Goals
As you review your life insurance needs for 2025, consider your long-term financial goals. Whether you're planning for retirement, saving for your children's education, or aiming to leave a legacy, your insurance policy can play a crucial role in achieving these objectives.
Policy Features To Consider
Explore additional riders or policy features that might benefit you and your family. For instance, 1891 Financial Life offers a living benefits rider, which allows access to a portion of your policy's death benefit if you're diagnosed with a terminal illness. Such features can provide invaluable financial support during challenging times.
Looking Ahead
As you prepare for 2025, remember that life insurance serves as more than financial protection — it provides peace of mind for you and your loved ones. Regular reviews and adjustments ensure that your coverage evolves with your life and offers the right protection at every stage.
Set up a consultation with 1891 Financial Life to explore how life insurance can fit into your financial strategy and support your long-term goals. Our team specializes in crafting personalized insurance solutions tailored to your unique needs. Contact us today, and we'll help you review your insurance policy!
About 1891 Financial Life
Our culture is about looking out — for you, for others, for family, for the community. That is how we go “Beyond Life Insurance.”
At 1891 Financial Life, we don’t just sell policies, we offer possibilities. We pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs. In 2023, 1891 Financial Life was listed by Forbes as one of "The World's Best Life Insurance Companies."
Our portfolio is extensive, ranging from various life insurance policies to our annuities to support your financial needs no matter what stage of life you’re in.