It is that time of the year again when people like to dust off the winter cobwebs and do some spring cleaning. It feels great to tidy up, re-organize and get rid of the things that you no longer need. Maybe it is time to tidy up your financial situation too. Many people who have bought life and health insurance to protect themselves and their families do not look at it again. They often never re-visit their policies again until they get their renewal notice. Ideally, you should be checking in with your insurance advisor at least once a year and after any major changes in your personal or financial situation (eg. getting married or divorced, having a child, buying a new home or a vacation property, changing jobs).
You could be overspending.
It is a good idea to have your insurance advisor check and compare the rates you are paying for a policy with what is currently available in the market. Often, the advisor can find you lower rates for a similar product and you can save yourself a significant amount of money. Why pay more than what you need to?
You could be missing much needed protection.
Changes in your personal situation can also create gaps in the protection you had previously set up. For example; a marriage or a new baby can create the need for life insurance to protect your family. Or an employment change, leaving a place of employment or retiring, can put you in a position where you need to ensure continued health and dental insurance or life insurance. You should sit down with your licensed insurance advisor to go over your current situation and whether your policies are still suitable to protect you.
You could have protection you no longer need.
You could you be spending money on something that is no longer necessary. Something that you bought to cover a need, 5 or 10 years ago may no longer be applicable. For example, you had previously purchased disability insurance because were self-employed and now you are employed at a company with group benefits that includes disability insurance. You may no longer need to continue to pay for the disability insurance you previously purchased. In this case, it is best to consult with your insurance advisor before cancelling your policy.
Estate planning
Changes in where you are at in your life can also trigger a need to re-visit your insurance situation. When you were younger, you may have decided upon a more affordable term life insurance policy versus a permanent policy. Now your earned income may allow for a more suitable permanent insurance policy. Also, for people who have maximized their RRSP, TFSA and child’s RESP contribution room, a permanent life insurance policy can offer an additional option for tax-free retirement savings.
An important part of being prepared for the future is protecting it. There is no time like the present to have a look at the insurance coverages you have and make sure they still fit your needs.
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