Apart from these reasons, consumers should keep revisiting their insurance portfolio from time to time and see if any add-ons or revisions need to be made in their policies, as per their individual growth chart and requirements.
Below are certain conditions, under which consumers should take a relook at their insurance coverage:
Increase in income
As one grows professionally, the pay cheques also keep growing. While growth of pay cheque is a sign of wealth, it is also an indication that one should do a life and health insurance review.
"With an increase in income, the sum assured should also be increased in alignment with one’s net worth. A life cover, around 10 times of one’s current net worth is considered ideal," said Indraneel Chatterjee, Co-founder at RenewBuy.
If liability increases, consumers should look at increasing their life insurance coverage. For example, if a person takes a home loan, they should ensure that there is sufficient life cover to round it up.
"In case of the policyholder’s demise (during the home loan tenure), the family members should not end up paying the EMIs, or the bank should not auction the house to recover dues," Chatterjee told CNBC-TV18.com.
Increase in family responsibilities
Increase in family members, like addition of spouse, children, and ageing of parents should definitely make one re-examine their health and life insurance policies. One should reassess their insurance portfolio and fulfil long-term financial objectives like buying a home, building a retirement corpus, building their children’s future.
With inflation increasing, it becomes a must to increase life and health insurance.
"Inflation is increasing at around 5 percent in the country, while medical inflation is expected to increase by around 10 percent this year. Thus, the insurance coverage for life and/or health, which a policyholder had five years before, will not be sufficient for them and the family in today’s scenario," Chatterjee said.
While these are some of the few reasons listed, there are many other factors which consumers should look at, while buying and renewing insurance policies. People increase their investment tools and investment amount with increase in wealth and responsibilities — similarly, they should look at increasing the insurance portfolio with time.