When should you review your life insurance?
Most financial advisors recommend reviewing your life insurance at least once a year, as well as after any major life event. Whether you've recently gotten married, welcomed a child, purchased a home, or changed jobs, it's worth taking a closer look to ensure your coverage still reflects your current needs and responsibilities.
As you review your policy, consider whether your coverage amount, term length, and beneficiary designations still align with your financial situation and long-term plans. Updating your term life insurance coverage when needed can help ensure it continues to support the people and goals that matter most to you.
Getting married: Add your spouse and review your coverage
Marriage is often accompanied by new shared financial responsibilities, whether that's combining household expenses, purchasing a home, or taking on other long-term commitments together. Ensuring you have the right coverage in place can help protect your spouse and any dependents if the unexpected happens.
Marriage is also a good time to review the beneficiaries on any existing life insurance policies. If you're wondering whether you can change a beneficiary on your life insurance policy, the answer is usually yes. Your spouse won't automatically become your beneficiary when you get married, so you'll need to update your policy if you want your coverage to reflect your current wishes.
For couples applying together, Blue Cross Life offers a 10% discount on first-year premiums. Choosing coverage that aligns with both your protection needs and your budget can help you build a stronger financial foundation together.
Having a child: Scaling up coverage for a growing family
Having a child is one of the most common reasons Canadians purchase life insurance. Whether through birth or adoption, welcoming a child into your family often increases your financial responsibilities and adds a dependent who may rely on your income for years to come.
When assessing your coverage needs, consider income replacement, childcare costs, and future education expenses, including RESP contributions. Some parents also choose to account for future milestones, such as helping with a wedding or contributing toward a first home. Planning ahead can help ensure your family has financial support in place for the years ahead.
As your family grows, it's worth considering policy features that extend protection to your children. Blue Cross Life provides $10,000 in life insurance coverage for each dependent child at no additional cost, including any future additions to your family.
Buying a home: Matching your policy to your mortgage
For many Canadians, a mortgage is their largest financial obligation. If you were to pass away unexpectedly, your spouse or dependents could be left responsible for mortgage payments and other household expenses. Life insurance can provide a tax-free benefit that can be used to pay down a mortgage, replace lost income, or cover other financial needs based on your family's priorities.
It's common to align your coverage amount with your outstanding mortgage balance and match your term length with your amortization period. For example, if you have 25 years remaining on your mortgage and $500,000 outstanding, a common approach is to choose a policy with at least a 25-year term and $500,000 in coverage. Understanding how to choose the right term length can help ensure your coverage aligns with your long-term financial commitments.
Divorce or separation: Revisit your beneficiaries and coverage
One of the most important updates to your life insurance policy after a divorce or separation is reviewing your beneficiary designation. In many provinces, a former spouse does not automatically lose their status as a beneficiary following a divorce. If you want your policy to reflect your current wishes, you'll need to contact your insurer and request a change.
Divorce or separation can also significantly change your financial situation. Whether you're adjusting to a single income, managing support obligations, or revisiting your long-term financial plans, it's a good opportunity to reassess your life insurance needs. If you have questions about your beneficiary designation or a more complex situation, consider consulting a legal advisor for guidance.
Career changes: Review your workplace coverage
Changing jobs can also affect your life insurance coverage. Many Canadians receive life insurance through their workplace benefits, but that coverage typically ends when their employment does. If you change jobs, become self-employed, or start working as a contractor, it's important to understand how those changes may affect your existing coverage.
Career changes can be a good opportunity to reassess your life insurance needs and identify any gaps in protection. Even if you have coverage through your employer, individual term life insurance can complement workplace benefits by providing coverage that's not tied to your job and stays with you if your employment situation changes.
As you age: Reassessing coverage at each decade
Life insurance needs can also change gradually over time. The financial priorities you have in your 30s may look very different from those in your 50s or 60s, making it important to periodically reassess your coverage. Consider both your protection needs and what remains affordable within your overall financial plan.
As you approach retirement, your mortgage balance may be lower, and your children may no longer rely on you financially. Your coverage priorities may shift from income replacement and debt protection to supporting a surviving spouse or covering final expenses and estate costs. With Blue Cross Life, coverage can continue beyond your initial term through annual renewals, and policies can remain in force until age 85, providing flexibility as your needs evolve.
How to update your Blue Cross Life policy
If you need to update your policy, Blue Cross Life offers support throughout the process. Here's what to expect:
- Step 1: Identify what needs to be updated, whether that's your beneficiary designation, coverage amount, policy term, personal information, or payment details.
- Step 2: Contact a licensed Blue Cross Life advisor by phone or email.
- Step 3: Your advisor will explain the process and provide any required forms.
- Step 4: Complete and submit any required documentation.
- Step 5: Confirm the change in writing and store a copy with your policy documents.
Need additional coverage after a major life change? Get a free term life insurance quote from Blue Cross Life to explore your options.
FAQs: Updating your life insurance policy after life changes
In most cases, you can change your life insurance beneficiary at any time. However, certain restrictions may apply depending on your policy, provincial legislation, or whether an irrevocable beneficiary has been named. If you're unsure, contact your insurer for guidance.
No, getting married does not automatically update your life insurance policy. After getting married, it's a good idea to review your beneficiary designations, coverage amount, and term length to ensure they still align with your needs and goals.
In many provinces, divorce does not automatically remove a former spouse as your life insurance beneficiary. If you want your policy to reflect your current wishes, you'll typically need to contact your insurer and request a change. Beneficiary rules can vary by province and may be affected by factors such as irrevocable beneficiary designations. To learn more, explore how beneficiary designations work.
A major life change is often a good time to reassess your life insurance needs. Depending on your policy and circumstances, there may be options available to increase your overall coverage, including applying for additional life insurance coverage. A licensed advisor can help you understand the options available to you.
Most financial advisors recommend reviewing your life insurance at least once a year and after any significant life event. Regular reviews can help ensure your coverage continues to align with your financial responsibilities, beneficiary designations, and long-term goals.
