We know, we know….nobody really celebrates reaching a big milestone by checking their insurance policies. But this can be a great time to 'check-in' as changes in your life can have a significant impact on life insurance. If you do allow it to roll over each year it could cost you money, or put your financial wellbeing at risk – so here are a few good times to check your insurance (as you clink those champagne glasses).
When you buy a house
Congratulations! We understand how hard Kiwis work to reach this major milestone (especially if you bought in Auckland). When you are taking on a mortgage, or any other sizable debt for that matter – it is a great idea to have a plan for that debt in case you pass away or are unable to work for a while. It may also help you sleep better at night in your new abode.
If you have a baby
If you are about to hear the pitter patter of little feet (or to be realistic, the 3am cries of a newborn baby) or if you are adding to the family, it’s natural to begin thinking about how to give your kids the best life you can. Updating or taking out life insurances can help to ensure that your children are taken care of, even if something happens to you – so it’s a good idea to check your insurances before a new family member arrives.
If you pay down debt
This one is a major cause for celebration! Managing to pay off your mortgage completely (again, especially in Auckland) or even chipping away at it every year will have an impact on your overall level of debt.
So as the years pass by, make sure to keep an eye on your mortgage (or any other loans) and as your level of debt decreases you could ask yourself if you now feel over insured? You may want to reduce your level of life insurance cover – that way you will be saving money in insurance premiums as well as bank interest.
If you get married (or divorced)
Okay so this may mean congratulations or commiserations if you’ve hit either of these milestones!
If you do get married or divorced, it probably means that you do not need to change your level of insurance cover, but at this point, it is a good idea to check who your policy owners and beneficiaries are and make sure that they are the ones you want.
When your kids leave home
Again, kids flying the coop can be a cause for celebration or commiseration – we imagine it would be a mix of both! Once your children reach independence and venture out into the big wide world it might have an impact on the amount of life insurance you want.
The changes you make to your insurance will be personal to you and depend on other circumstances like your level of debt. But if you can reduce your cover a little, the savings in premiums might help you feel a bit more like celebrating, even while you’re missing your kids!