When should I review my life insurance cover?

Jan 2023

When was the last time you checked on your life insurance and insurance inside super? Does your existing cover meet your current needs? It might be time for a review.

Life insurance and insurance inside super can seem like a 'set and forget' part of your finances. But it’s important to check in occasionally and make sure your cover matches your needs as your life circumstances change.

How often is it recommended for people review their cover?

It is believed this should be a yearly conversation. You may not need to change your cover every year but it’s definitely something to check.

What events influence making a change to your life insurance cover?

It depends on your life and if something significant happens that changes the numbers. It could be time to review your cover if you’ve:

  • had children
  • come into money
  • paid down significant debt
  • taken on more debt, such as a mortgage
  • had a pay rise or changed jobs
  • changed your relationship status
  • stopped paying school fees
  • have adult children no longer at home

"It depends on how much you earn and your financial commitments," says Myles Thornton of Thornton + Lee. "For middle-income earners, it's likely the amount of insurance they have today will be relevant in the next five years. High-income earners may have large commitments but also pay down debt faster while accruing assets. Their wealth could look quite different in three to five years, so they may need to review their insurance more regularly."

MetLife’s Head of Delivery Katrina Mellor says many people start thinking about their insurance cover when someone they know becomes ill or passes away. "You can't help but take stock and say, ‘If this were me or my partner, what would happen to my family?’ Unfortunately, being in your 20s or 30s doesn't make you immune to those things. Everyone needs to review their insurance needs."

What questions should people ask when reviewing insurance?

When things change, says Katrina, ask yourself:

  • Does this change my financial situation?
  • Does this change my current level of debt?
  • Does this change my future provisions of money to those around me?

When might people need less insurance?

As your asset base grows, debt diminishes and your family gets older, there's possibly a need to dial back cover. With rising insurance prices, reviewing your life insurance is a good way to mitigate rising costs.

What aspects of your policy should you consider?

"Think about what you would need every month if something were to happen to you," says Katrina. "Make sure you could still meet your mortgage or business commitments. If you were diagnosed with cancer, for instance, and couldn’t work for some time, a lump-sum insurance inside super payment could help extinguish your debt. When people don't have insurance, they often lose the ability to make choices and are forced into decisions they don’t want to make about their home, jobs and finances. Having the right cover in place means peace of mind."

Find a financial adviser who will help you get the life insurance cover you need for your life stage.

While care has been taken in preparing this content, MetLife Insurance Limited (ABN 75 004 274 882, AFSL 238096) (MetLife) does not warrant or represent that the information, opinions or conclusions contained in this information are accurate.  The information provided is general information only and is current as at the time of production. It has been prepared without taking into account your personal objectives, financial situation or needs and you should consider whether it is appropriate for you. It is not intended to be a substitute for professional advice and should not be relied upon as such. MetLife recommends that you obtain independent and specific advice from appropriate professionals before implementing a financial strategy, including reading any relevant product disclosure statements and/or terms and conditions. 

Before deciding whether to acquire, or continuing to hold, any of our products, please read the Product Disclosure Statement and Target Market Determination available at MetLife Protect is issued by MetLife and MetLife Protect Super is issued by Equity Trustees Superannuation Limited
(ABN 50 055 641 757, AFSL 229757) (ETSL).

More articles from MetLife 

Read more