When the winter holidays approach, we typically gather with our friends, family members, and professional peers to share the joy of the season. Hearty laughter and the clanging of glasses to raise toasts enhance the ambiance of the most festive time of the year. As the famous song goes, “It’s the most wonderful time of the year.”
Not so much in 2020, as the winter holiday season fast approaches with an abundance of caution and hopefully, good sense. The COVID-19 pandemic has changed how we interact during the winter holidays. Expect gatherings to be much smaller, as well as much shorter in length. The exchanging of presents will happen via online purchases and distribution by using an express delivery company.
Although the “new normal” for the 2020 holidays has changed the way we celebrate, there is one thing most of us should do as we head into 2021.
The Annual Life Insurance Policy Checkup
Most of us undergo an annual physical, as well as take our vehicles in for regularly scheduled maintenance. Look at your life insurance policy like you look at an annual physical or a regularly scheduled vehicle tune-up.
The end of 2020 is a great time to give your life insurance policy an annual tune-up and physical examination. You should focus on two types of changes: Administrative and policy.
A lot can happen in 365 days, which means you should check your life insurance policy to ensure the information is current, as well as change the beneficiaries of the policy.
Contact Information Changes
Although we tend to inform our friends, relatives, and employers about phone and address changes, the same cannot be said for our life insurance policies. The end of the year represents a good time to ensure all your contact information is accurate. If you moved during the year or and/or changed your primary phone number, it is especially important to tell your life insurance carrier before 2020 runs out.
This is an important consideration if you have added a bank account and you want to use the new account for the automatic withdrawal plan set up with your life insurance company. Most life insurance premiums come out of an automatic withdrawal plan, with a life insurance company taking money out of customer accounts on the same date each month. If you want to change the bank account you use for the automatic withdrawal plan, your insurer needs to know about the change.
Adding and Removing Beneficiaries
Adding a beneficiary usually happens after the birth of a child, while removing a beneficiary is often the result of the death of a beneficiary. Divorce and separation are other reasons why life insurance policyholders make changes to the names of the beneficiaries.
The end of the year represents the ideal time to review your life insurance policy to determine whether some parts of it need to be changed.
Change of Income
Let’s say you received a generous raise, and you want to make sure the death benefit on your life insurance policy reflects that increase in annual income. You need to make a change to the policy for the extra death benefit to kick in. The same principle applies to a decrease in income.
Have you made a significant change in your life that has improved your health? Maybe you quit smoking or enrolled in an aerobics class. The change has enhanced your health, which should lower your monthly premium. If you have suffered a health setback, your life insurance company needs to know about that as well.
Our busy lives make it difficult to stay on top of personal finance matters like life insurance. If you set aside time at the end of every year, you will make the changes you need to make to ensure your life insurance policy remains current.