Disability insurance provides a crucial financial safety net in the event of an unexpected illness or injury that leaves you unable to work. However, many people don’t realize that simply purchasing a disability insurance policy is not enough – they also need to regularly review their policy to ensure that it adequately meets their needs.
Here are some of the reasons why reviewing your disability insurance policy is so important:
Ensuring Adequate Coverage: As your financial circumstances change, so too might your insurance needs. If you receive a raise or promotion, for example, you may need to increase your policy’s benefit amount to ensure that it fully covers your current salary.
Checking for Policy Exclusions: Disability insurance policies can contain exclusions that limit coverage for certain types of conditions or injuries. It’s important to review these exclusions to ensure that your policy will cover you in the event of an illness or injury that is most likely to impact your ability to work.
Familiarizing Yourself with Policy Terms: Insurance policies can be complicated, and it’s important to fully understand the terms and conditions of your policy. Reviewing your policy regularly will help ensure that you know what is covered, what is excluded, and what your rights and responsibilities are under the policy.
Checking for Updates: Insurance policies can be updated or revised periodically, and it’s important to review these changes to ensure that your coverage remains current and effective.
In addition to these practical considerations, taking the time to review your disability insurance policy can also provide peace of mind, knowing that you have taken the necessary steps to protect your financial future.
So, how often should you review your disability insurance policy? Experts recommend reviewing your policy annually, or whenever there is a major change in your life circumstances such as a marriage, divorce, new job, or a significant change in income.
Ultimately, reviewing your disability insurance policy is an important part of practicing good financial management. If you haven’t reviewed your policy in some time, now is a good time to start!
