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Life insurance: When and why should review it

DFSIN - Taking time to review your needs

There are various times during the course of a lifetime when it is a good idea to review your life insurance coverage.

To help you figure it out, we have listed 15 major life events that provide good reasons for starting a discussion with your financial services representative and updating your life insurance coverage.

1. You buy a home

Buying a primary or secondary residence represents a significant financial commitment. You need to cover the amount of this commitment with a life insurance policy so that your heirs will not be burdened with the debt if you die.

2. Your family grows

Each new child represents an additional responsibility. If you took out a life insurance policy when your first child was born, it would be wise to review it when the second one comes along.

3. You become a grandparent

As a grandparent, you may feel responsible for your children’s children. With life insurance, you can leave them money instead of debts if you die, and even help them realize their dreams.

4. Your relationship status changes

Ending a relationship or entering into a new one can have an impact on your life insurance policy. You might want to change beneficiaries or adjust your coverage according to your new situation.

5. You get a salary raise

A higher salary means a higher standard of living. Review your life insurance policy to make sure your survivors can continue to enjoy their standard of living after your death.

6. You lose your job or get a new one

Your employment status affects your family situation. This is why you have to consider reviewing your life insurance if you lose your job or get a new one.

7. You start a business

Starting a business is exciting – and risky. Business partners should think about ensuring the viability of the company, the stability of the shareholder agreement and the security of their families, in case of death.

8. You take out a major loan

Do not make your heirs responsible for your debt! Let your life insurance cover any significant loans you contract.

9. Your spouse becomes critically ill

You have to ensure your family’s financial security in case your spouse becomes critically ill. This could require a significant change to your life insurance policy.

10. Your child becomes critically ill

A critically ill child may require expensive care for which you will not want to make compromises. Life insurance will enable the continuous payment of these costs, should one parent die.

11. One of your parents becomes less autonomous

Aging parents can be a significant financial burden. Who will inherit the responsibility of their care if the primary person who has been handling it should die? Life insurance can cover this possibility.

12. Your children leave home

When your children leave home and become independent, the use and purpose of your life insurance can be affected. Consider other possible options.

13. You plan a trip

Before travelling, particularly if you will be out of the country for an extended period of time, make sure your life insurance coverage is appropriate.

14. You lose your spouse

When one spouse dies, the surviving spouse is left with all the financial responsibilities that used to be shared, particularly those relating to children. This would be a good time to review your insurance policy.

 15. You decide to give to charity

If you have a favourite cause or charity, your life insurance policy can help you pursue your philanthropic project after your death.