If you have taken a life insurance policy, likely, you don’t think about it often. After a while, it seems like a car that drives itself. Life insurance gives you the security and peace of mind of knowing that your family would be financially safe in the event of your death.

But it’s crucial to not get too comfortable or fall into a sense of complacency as life, as we know, is pretty unpredictable. As the economy changes, so will your financial life changes and your life insurance needs.

To be on the safer side, it’s always a good idea to re-evaluate your life insurance coverage every few years, especially after major life changes, such as marriage, divorce, or having children. The changes could be good or bad, depending on your financial needs and condition.

Below are some of the changes to consider after reviewing your life insurance:

Buy more coverage

You may think there’s no reason to buy more coverage now. But what if you have more children in the future?  More children will add many years of child-care and education expenses. The most obvious way to secure more life insurance is to buy another policy that adds to your existing coverage.

It’s even better if your needs are specific. For instance, if you only want to cover the years of your child’s education or the length of a mortgage, then term life is the right type of life insurance for you.

Convert term life to permanent life

Most term life policies are convertible term life insurance. You can easily switch your term life policy to a permanent policy such as whole life or universal life depending on the company that issued the term life insurance.

You don’t even have to convert the entire policy. You can just convert a portion, such as $100,000 of a $1 million term life policy.

Cash-out a permanent life policy

If you feel like you don’t need to own permanent life insurance, you can surrender it for the cash value. However, the downside to this is that your beneficiary won’t be able to make a life insurance claim when you die.

Cashing out is a suitable option only if you have a permanent life insurance policy or you feel like you don’t need life insurance coverage anymore.

Sell your life insurance policy

If you don’t want your permanent life insurance anymore, there’s also the option of selling it. A third party can buy your policy at a price that’s more than the cash value and less than the death benefit. This transaction is called a life settlement. After buying the policy from you, the buyer then makes the premium payments and gets the death benefit when you die.

Before making any moves, do your research and talk to a financial advisor as it’s often difficult to tell whether you’re getting a good deal. You can sell your policy through a life settlement broker or through a life settlement company that buys policies.

And according to the Financial Industry Regulatory Authority, the transaction fees can cost up to 30% of the settlement.


Always remember to review your coverage and life insurance needs periodically, even if you recently bought a policy or you purchased one year ago.

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