Nothing in life is permanent. What you think was enough life coverage for you years back might no longer apply to your current life terms. It should not be a concern, though. You can always adjust your coverage accordingly, as long as you have an understanding insurance provider that prioritizes your protection above anything else. If you need to increase your life insurance coverage, here are the three steps you should know.
Step 1: Identify how much coverage you need
Before finding the way to get your life insurance coverage increase, you first need to know how much augmentation you need. There is a fine line between getting the high coverage you want and not paying too much for your actual needed insurance.
Everyone’s circumstances are different, but in general, an average person should have coverage of around ten 10 to 15 times their income. Before you compute for your target goal, make sure also to consider the following factors:
- Any outstanding debt
- Any dependents, such as elderly parents or children
- Future necessary spendings, such as college tuition
- End of life expenses
- Financial cushion or your emergency fund
The more expenses like this that you will leave when you die, the more life insurance you need to get to make sure that these concerns will not fall upon your loved ones.
Step 2: Undergo the same underwriting process
Now, you need to figure out how your term policy works. Unfortunately, asking your insurance provider to increase your death benefit and immediately paying a new premium does not work. There are specific rules to follow and a process to complete.
What you can do instead is to check if your policy has an extension benefit. You can talk to your financial advisor and raise your interest in the adjustment, and they will tell you what you can do to increase it. The process will vary across different carriers, but here is what you should expect:
- Retake a medical exam – In some cases, you need to undergo a medical exam again. Lab results are usually valid for 6-12 months, so if your last result was still under this timeline, you could skip this process. If your lab results are past the timeline, you need to redo the process. Like what you did the last time, there will be a physical exam to get your height and weight, and evaluate your health. You will also be checked for conditions such as high blood pressure, diabetes, and elevated cholesterol. The healthier you are, the better the insurance classification you will get.
- Get your APS (Attending Physician’s Statement) – This process is when your attending physician will create a remark telling your insurer about your complete health history and any prescriptions you are taking, if any. The result from this step will help your insurer to determine your classification.
- The approval – Your insurer will then collect your application data and all other information to gauge and approve or reject your coverage increase request.
Step 3: Change your policy to a permanent life insurance policy
Most life insurance is a term policy that provides coverage for a certain period or a specified “term” of years, and they often come with a built-in rider called the term conversion rider. This rider allows you to convert your term life policy into a permanent one as soon as it expires.
When you decide to do this, it will free you from going through the same process to retain the same coverage. However, you may still need to redo specific steps in the process if you will have the following tweaks in your current policy.
- You did not go through the entire underwriting process in getting your life insurance
- You want an increase in your benefit amount
- You want additional riders to the policy
- Your health changed drastically since the beginning of your policy
Important Reminder: If you are thinking of converting your term policy into a permanent one, you need to request and begin conversion at least six months before your policy’s expiration date. Make sure that your policy also has the rider. If there is none, make sure you have other options.
Conclusion
Your life insurance should be flexible enough to meet your life’s changing demands. When dreaming of getting an increase in your life insurance coverage, evaluate the right coverage you need, and go through the proper process. Expect to pay higher premiums when making these changes. There may be a lot of processes to handle, but knowing all your loved ones will be better taken care of because of this move makes all the sacrifices worth it.
Make sure to get your life insurance from insurance companies that are easy to talk with. At Quesurance, we have an online service to assist you with any concerns, may it be on flood insurance cost or small business insurance. Connect with us today.
