Your go-to checklist for keeping your life insurance policy up to date

Step 1

Take a look at the full picture and assess your plan against your current circumstances

Assess your current cover in its entirety to determine whether or not it is still realistically sufficient in relation to your circumstances. More importantly, can your current coverage realistically provide enough financial security if a major life event had to occur today?

It's important to consider how any potential changes in your life may impact your plan, such as:

• How has your family structure changed?
• Have you had any children?
• Are your children older now than when you took out your policy?
• Are you financially prepared for schooling or tertiary education costs?
• Have your children now grown and established their own independent lives?
• Have you or any one of your loved ones developed a severe illness or disability?

Step 2

Cross-check that any of your plan benefits or the policy in its entirety haven't lapsed

Such a set of circumstances could bring about a nasty realisation if you had a need to claim, so it's crucial to double check things frequently enough - especially policies you may have had with an employer before retirement. It's also a good idea to go over any fine print to check at what age your benefits may be stipulated to lapse at.

Step 3

Ensure that your list of beneficiaries and their details are up to date

Just as your own circumstances may change, so too can those of your beneficiaries. This can affect how your plan is administered when needed. So, it's important to update changes as they directly affect you and your chosen beneficiaries.

Things to consider include:

• Do you now have grandchildren?
• Have you gotten divorced? Or remarried?
• Do you need to adjust the share percentages of your adult children?
• Have any of your beneficiaries relocated?
• Have you lost someone dear to you?

Step 4

Reassess your life insurance goals

• What do you need to safeguard today and into the foreseeable future?
• Do you still need financial security for loved ones to be able to pay off a home loan?
• Do you need to potentially consider tertiary education costs at either a local or internationally based institution?
• Would you like to encourage your young adult children to use a pay-out to help support or boost a retirement nest egg?
• How has your overall health been looking? Should you consider some potential contingency planning, such as a relook severe illness cover?  

This is a great opportunity to align your current and potentially foreseeable needs against your goals to ensure that you plan enough cover should it be needed down the line.

Step 5

Relook your estate plan

• Does your will need updating?
• Have there been any applicable tax amendments that could affect your plan?
• Is all your necessary documentation in order?
• Have you or one of your beneficiaries moved overseas where different jurisdictions apply?
• Are your beneficiary preferences still the same?
• Do you now have a property overseas?
• Are you running a business internationally?
• Do you have offshore investments?
• Can you benefit from setting up a trust?

Your estate plan needs to factor in your life insurance cover. To avoid negative implications, liabilities and legal pitfalls, it's a good idea to review your entire estate plan annually too as part of your life insurance audit.

Step 6

Carefully consider any sound advice given by your financial adviser

The aforementioned steps all paint a clear enough picture of your current life insurance coverage. Where gaps or oversights have been identified, assess your options together with your adviser to best identify a fitting solution to either add or change in your policy structure. A knowledgeable adviser is best placed to assess what solutions are available in the market and advise on which may be a good fit for your needs and goals.