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As our financial situation changes through the stages of life, so does the need for life insurance. Once you have purchased life insurance, consider reviewing your policy in the event of major life changes, such as a marriage or divorce, additions to the family, purchase of a new house or paying off a mortgage. Make certain your protection continues to keep pace with your needs. At a minimum, you should have a professional review your circumstances at least every five years.

There are two other factors to consider in life insurance planning. The first factor is inflation. Coverage you purchased several years ago that you once thought was adequate may now be insufficient due to inflationary pressure.

The second consideration in your life insurance planning is life expectancy. Your life expectancy has two important characteristics which influence the way insurance companies price their policies. The first of these characteristics is that the probability of death rises with age. The second is that the probability of death eventually becomes a reality. In other words, insurance companies want to figure the average amount of time you will have to pay on an insurance policy before it is time for your beneficiaries to collect on that policy.

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