In case you are planning to get divorced, you can decrease the cover. But if you have children or dependent parents, the cover should remain same. Nomination is another important aspect to be taken into consideration on both the situations. After getting married, you may want to assign your wife as the beneficiary for your insurance policies or change the beneficiary of your life insurance from your wife’s name to your children’s name or your dependent parent’s name after a divorce.

Had a Child

Parenthood is beautiful, but it comes with the lot of responsibilities. You shall need more life insurance policy to secure your child’s future. It is very important to update the list of nominees to incorporate the child. It is an important advice that you should not forget to incorporate your child in your health insurance policy too.

Considering the high cost of education and high inflation, it would be wise to start planning early for your child’s future needs. You can buy child insurance plans which are specially designed to provide long-term benefit for your child’s education as well as marriage. You can even choose money back policies, which give cyclic money back of lump-sum cash, for this point. Always prefer a plan which offers premium waiver benefit, this will help to prevent your policy from getting lapsed if you are unable to disburse premium due to some miss-happening. If you are not around then also your child’s financial needs are take care of. Apart from this, you can also buy some additional risk coverage like, disability and critical illness plan as a protector against accidents and ailments that might hamper you from working.

Change in Your Income Level

If you got a promotion or your income level is increased, consider upgrading your insurance policies as well. As there will be an increasing flow of cash, you will need to boost the sum-assured of your insurance policy according to your present income level. You insurance policy should be changed depending on your age, lifestyle and your financial goals or situation. Based on your earning, you can consider investing in a plan that is advantageous to your long-term goals such as retirement plan, housing or home financing, child’s future, etc.

On the other hand, if you are fired by your boss and you are jobless or your income level is dropped, you may consider dropping down your insurance premium. Unit-linked plan generally offers flexibility of skipping premium payment. You can also consider surrendering a policy and decrease the coverage to undertake the circumstances, but you should be prepared to pay the surrender charges and get a lower return if you are winding up you policy before the end of lock-in period. So this can be your last option to choose.

Took a loan

If you have taken an additional financial commitment recently, extend your life and disability insurance proportionately so that they cover those commitments. A loan is generally called liability and it is very important to ensure that your families don’t have to pay the EMI’s if you are not around. So, if you are planning of a home loan, ensure that you simultaneously buy a mortgage cover we also call such insurance policy a “pure term insurance policy”. This policy is the most preferred way of covering all outstanding financial liability and takes an adequate risk cover.