With every January comes a fresh start and a reminder to do those mundane tasks. The tasks you’ve been meaning to get around to but never quite remember.

We want to urge people like you to consider using 2024 as an incentive to give yourself a financial MOT.

As the cost-of-living crisis shows limited signs of slowing down, it’s essential to look at where you can make suitable financial savings. After all, every penny helps.

We think that there are two clear resolutions you should have this January.

1. Take out a life insurance policy or income protection plan to protect your family.
2. Take a few moments to review an existing plan and make sure that it’s still appropriate for your needs.

But first, let’s begin by explaining why life insurance is so important.

Why is life insurance important in financial planning.

Life insurance is there to provide your loved ones with a financial sum when you pass away. That money can be used to help maintain living expenses, pay off the mortgage, set aside money for school or university fees, or be a nest egg for your loved ones.

Typically, you will pay a monthly or annual premium in exchange for a pre-agreed level of financial cover.

Your life insurance policy may last a specific timeframe (known as a term policy), or it will last until the end of your life (known as a whole-life policy).

As life insurance isn’t a legal requirement like car insurance, nor a must-have like travel or home insurance, it’s often a forgotten-about policy. Too many people see it as a luxury – something they can see the value of, but something which can be put off until a later date.

But we view life insurance as an invisible superhero guarding your loved ones.

It’s a safety net combining love and responsibility, ensuring that your family can cope with life’s unexpected moments with a significant financial buffer. It offers long-lasting protection in ways that other insurance plans simply cannot compare.

When should I take out a life insurance policy?

If you’ve yet to take out a life insurance plan, now is an excellent time to think about it.

But here at The Insurance Surgery, our decades of experience tell us that most people will typically take out a life insurance plan when they’ve achieved a specific “goal” in life.

For example:

• Wedding bells: Have you recently got married? Or did you get engaged this Christmas? Saying “I do” means that you are a financial partnership. You could consider upping your cover to reflect your joint income or opt for a joint policy – one which will ensure lasting financial protection till death do you part.
• Baby boom: Having a baby is always a great time to think about your life insurance. You want to make sure that whatever happens, your child is financially secure. If your children are growing older and are now financially independent, you could consider scaling down your level of cover – potentially reducing your premiums while still offering lasting protection.

• Buying a house: Many mortgage providers will want you to have a life plan when taking out a mortgage because it offers reassurance that your mortgage will continue to be paid in the event of your death (or your partner if you have a joint mortgage).
• Career climbs: If you’ve recently had a promotion, then congratulations! That deserves a financial pat on the back. If you’re now earning more money, it’s an ideal time to think about taking out a life insurance or income protection plan to ensure that you have long-lasting financial security in place.

How life insurance policies work?

You might think this advice isn’t for you. After all, you’ve already protected yourself with life insurance, critical illness or income protection.

What more do you need to do?

Well, life, as its name suggests, is rarely static. Your financial landscape will evolve with plenty of ebbs and flows. Your life insurance plan should be a trusty partner who works alongside you, not a rusty anchor holding you down. A policy designed for a single income won’t suffice for a growing family. Similarly, cover meant for a young couple might need adjusting during retirement.

Too many people think that a life insurance policy is precisely that.

One that you’re stuck with for life.

But they are surprisingly flexible – and it makes sense that you can scale your insurance up and down as your life changes.

But as our lives unfold, so do our needs and priorities.

That’s why reviewing your life insurance isn’t just a dusty paperwork chore; it’s a crucial act of futureproofing your family’s well-being.

If you’re reviewing a life insurance policy, we recommend that this is something that could, and should, be done every few years.

Here are a few of the common red flags that scream it’s time to review your life insurance.

Am I underinsured?

Has your income skyrocketed since you signed up? Your cover might have been enough to protect you in the past. Still, suppose you’ve moved to a bigger house, you’ve got a larger income, started a family or have new dependents. In that case, you need to think about your financial protection (while helpful), which may not be exactly what you need.

Am I overinsured? 

Conversely, the opposite is also true. Perhaps you’ve downsized your lifestyle or paid off your mortgage. You could have started a new job with exceptional death-in-service benefits, or you might have taken out protection for the kids, who are now financially independent. We don’t want you to pay more than you need to because you are over-insuring yourself.

Do I have the wrong type of policy?

Life insurance can be tricky to understand. If you’ve taken out protection through an online comparison website, you might not have the right plan for your family. While term life is often cheaper than whole-life policies, they do have their disadvantages. If you outlive your term plan, you could be left with no financial security. We’ll always talk to you about what your options are at different stages of your life.

Are my beneficiaries outdated?

You chose to take out a life plan to offer financial reassurance for named beneficiaries – but are the people you wanted to protect still the right people? You may have gotten divorced, remarried, started a family, or welcomed new family members. Your children may have grown up and become financially independent. There are hundreds of reasons why your beneficiaries may have changed. It’s important to periodically check that your insurance payout will go to the right people.

Remember, neglecting your life insurance review is like playing financial Russian roulette. Don’t gamble with your family’s future security.

Take advantage of the fresh-start spirit, dust off your policies, and give them a thorough once-over.

You might be surprised at how a minor tweak can make a world of difference.

We’re here to help you make the most of your finances.

Here at The Insurance Surgery, we know that life insurance isn’t just a relentless payment that you make each month. It’s a safeguard that protects your family in the worst-case scenarios.

We’re here to help you make the most of your financial resolutions, whether that’s taking out a new life plan or reviewing an existing plan to make sure that it’s still fit for purpose. We can signpost you to providers that offer value-added services, or we can scale up or down your level of cover quickly and easily.

Let’s get our finances and our life insurance truly in order. After all, a secure future is the best resolution you can make.