Life changes constantly. Your life insurance policy should keep up with those changes. Many people buy life insurance once and then forget about it for years. This is common. But it can lead to gaps in coverage or paying for something that no longer fits your needs.
Reviewing your life insurance policy is not complicated. It is simply a way to check whether your coverage still matches your life today. This guide explains why policy reviews matter, when to do them, and how to do them properly. It is written for beginners and applies globally, with a focus on Canada.
What Does It Mean to Review a Life Insurance Policy?
Reviewing your life insurance policy means taking time to look at the details of your coverage. You check what you have, what it costs, and whether it still fits your situation.
A review does not always mean changing or buying a new policy. Sometimes, it only confirms that your coverage is still right.
A basic review includes:
- The type of life insurance you own
- The coverage amount
- The premium you pay
- The policy term or duration
- The beneficiary information
Why Reviewing Your Life Insurance Policy Is Important
Life insurance is meant to protect people who depend on you. If your life changes, your insurance needs may change too.
Life Changes That Can Affect Your Policy
Here are common situations where a review is important:
- Getting married or divorced
- Having children or adopting
- Buying a home or taking on a mortgage
- Starting or selling a business
- Changes in income
- Paying off major debts
- Moving to another country or province
- Approaching retirement
In Canada, most people buy life insurance when they are young and keep it unchanged for decades. This can result in too little coverage or sometimes more coverage than needed.
How Often Should You Review Your Life Insurance?
A simple rule is to review your policy every **one to three years**. You should also review it whenever a major life event happens.
You do not need to wait for a problem. A regular review helps you stay confident about your financial protection.
Understanding the Type of Life Insurance You Have
Before reviewing your policy, it helps to know what type of life insurance you own.
Term Life Insurance
Term life insurance provides coverage for a specific period, such as 10, 20, or 30 years.
Key features:
- Lower cost
- Fixed term
- No cash value
- Coverage ends after the term unless renewed or converted
A review is important because:
- Your term may be ending
- Renewal premiums can increase
- Your needs may have changed
Permanent Life Insurance
Permanent life insurance lasts your entire life, as long as premiums are paid.
Examples include whole life and universal life insurance.
Key features:
- Lifetime coverage
- Higher cost
- May include a cash value
- Often used for estate planning in Canada
A review helps ensure:
- Premiums are still affordable
- Cash value is performing as expected
- The policy still fits your long-term goals
How Much Life Insurance Coverage Do You Need?
Coverage needs change over time. When reviewing your policy, ask yourself a simple question:
“If I were gone today, would my family be financially secure?”
Things to consider:
- Outstanding debts
- Mortgage balance
- Living expenses
- Childcare and education costs
- Final expenses
- Income replacement
In Canada, many families underestimate these costs. A policy review helps adjust coverage to real needs, not guesses.
Reviewing Your Beneficiaries
Beneficiaries are the people who receive the life insurance payout. This part is often overlooked.
You should review beneficiaries if:
- You got married or divorced
- You had children
- A beneficiary passed away
- Your relationships changed
In Canada, beneficiary designations can override a will. That is why keeping them up to date is very important.
Reviewing Premiums and Affordability
Life insurance should fit comfortably into your budget. During a review, look at:
- Current premiums
- Payment frequency
- Any upcoming increases
If premiums feel stressful, it does not always mean you should cancel your policy. There may be options such as:
- Adjusting coverage
- Changing payment methods
- Reviewing policy structure
A calm review helps avoid rushed decisions.
Policy Riders and Additional Benefits
Some life insurance policies include extra features called riders. These provide added protection.
Common riders include:
- Critical illness rider
- Disability waiver of premium
- Accidental death benefit
During a review, ask:
- Do I still need these riders?
- Are there riders I should consider adding?
- Do the benefits still match my situation?
Real-Life Example: Why Reviews Matter
Consider a simple example.
A 30-year-old Canadian buys a 20-year term policy when single. Ten years later, they are married with two children and a mortgage.
Without a review:
- Coverage may be too low
- Beneficiaries may be outdated
- Protection may not cover family needs
With a review:
- Coverage aligns with family responsibilities
- Beneficiaries are updated
- Peace of mind is restored
Common Myths About Reviewing Life Insurance
Myth 1: Reviewing Means Buying a New Policy
A review often results in no changes at all.
Myth 2: Life Insurance Reviews Are Only for Older People
Young adults benefit the most from early reviews.
Myth 3: Reviewing Is Complicated
Most reviews are simple conversations and policy checks.
What Not to Do When Reviewing Your Policy
Avoid these common mistakes:
- Cancelling a policy before reviewing alternatives
- Ignoring renewal notices
- Assuming coverage is “good enough”
- Forgetting beneficiaries
- Making changes without understanding the impact
Key Takeaways
- Life insurance needs change over time
- Regular reviews help keep coverage relevant
- Reviews improve financial confidence
- Beneficiary updates are critical
- Reviews are educational, not sales-driven
A life insurance policy should grow and adapt with your life.
A Gentle Next Step
Reviewing your life insurance policy is one of the simplest ways to protect your future and your loved ones. Even a short review can uncover important details you may have missed.
If you would like guidance, clarity, or simply a second opinion, consider speaking with a licensed life insurance broker. A good conversation can help you understand your options and feel confident about your coverage.
Learning and staying informed is the best first step.