A life insurance review looks at the insurance you currently hold and compares it with your situation today.

This may include reviewing:

• Your current amount of life insurance
• Your mortgage and other debts
• Your household income
• Who relies financially on you
• Your savings and investments
• Your family circumstances
• Your existing policy benefits
• Your premium structure
• Who owns your policy
• Any other personal insurance you hold

The aim is to identify whether there are any gaps, unnecessary overlaps or areas where your cover may no longer match your needs.

Halo Advisers can review existing policies and identify potential gaps or overlaps as part of its insurance advice process.

1. You Have Bought a Home or Changed Your Mortgage

Buying a home is one of the biggest reasons people first consider life insurance.

If your household depends on two incomes to meet a mortgage, you may want to consider what would happen to that debt if one person died.

As your mortgage changes, your insurance needs may change too.

For example, you might:

• Buy your first home
• Move to a more expensive property
• Increase your mortgage for renovations
• Purchase an investment property
• Refinance
• Pay a significant amount off your mortgage
• Become mortgage-free

Taking on more debt may mean you need to reconsider your level of cover.

On the other hand, if you have paid down a substantial portion of your mortgage, you may eventually find you no longer need the same amount of life insurance you once did.

2. You Get Married or Enter a Long-Term Relationship

A relationship can significantly change your financial responsibilities.

You may begin:

• Sharing household expenses
• Taking on a mortgage together
• Combining debts
• Building savings together
• Planning for children
• Relying on each other’s incomes

A life insurance review can help you understand what financial impact the loss of either income could have on the other person.

It is also worth checking how your policy is structured and who would receive the proceeds.

3. Your Relationship Ends 

Separation or divorce is another important time to review insurance.

Your financial responsibilities may have changed considerably.

You might need to reconsider:

• The amount of cover you hold
• Your mortgage obligations
• Financial support for children
• Policy ownership
• Beneficiary arrangements where applicable
• Other insurance held jointly

Do not assume your insurance automatically reflects your new circumstances.

A review can help make sure the structure still makes sense after the relationship has changed.

4. You Have a Baby or Your Family Grows

Having children is one of the biggest changes to a household’s financial responsibilities.

Suddenly, your income may be supporting more than just yourself and your partner.

There are now years of future expenses to consider.

These might include:

• Everyday living expenses
• Housing
• Childcare
• School costs
• Activities and sport
• Future education
• Reduced income while one parent cares for children

When reviewing life insurance after having a child, it can be useful to ask:

If one parent was no longer here, what would the surviving parent need financially to keep the family stable?

That might include paying down debt, replacing lost income or covering additional childcare.

5. Your Children Become Financially Independent

The opposite can happen later in life.

Children eventually grow up, start working and become less financially dependent on their parents.

At the same time, your mortgage may be much smaller and your savings may have grown.

This can reduce the amount of financial protection your household needs.

A life insurance review is therefore not always about increasing cover.

Sometimes the appropriate outcome is reducing it.

The goal should be to keep your insurance aligned with the financial responsibilities you actually have.

6. Your Income Changes

A significant income change can also be a good reason to review your insurance.

Perhaps you:

• Receive a major pay rise
• Change careers
• Reduce your working hours
• Become self-employed
• Take parental leave
• Move from two household incomes to one

As income increases, household spending and financial commitments often increase with it.

You may take on a larger mortgage, increase childcare costs or become responsible for more household expenses.

A lower income can also mean your budget for insurance needs reviewing.

Life insurance should form part of your wider financial position rather than being considered separately from it.

7. You Start or Buy a Business

Business ownership can add another layer of financial responsibility.

You may have:

• Business loans
• Personal guarantees
• Shareholders
• Employees
• A family relying on business income
• Business partners relying on your contribution

Your personal life insurance may need reviewing alongside your business insurance arrangements.

Business owners may also need to consider other forms of protection, including Key Person Insurance.

You can read our guide on what Key Person Insurance is and whether your business needs it.

Halo Advisers also provides dedicated Business Insurance advice for businesses wanting to protect their people, income and ongoing operations.

8. Your Health or Lifestyle Changes

Changes to your health and lifestyle can sometimes affect your insurance.

For example, perhaps you have:

• Stopped smoking
• Made significant lifestyle changes
• Improved certain health measures
• Changed occupation
• Given up a higher-risk activity

Depending on your insurer and individual circumstances, it may be worth discussing whether those changes affect your existing premium or future insurance options.

However, it is important not to cancel an existing policy simply because you think you may qualify for something cheaper elsewhere.

Any new insurance application may involve fresh medical and financial assessment.

Your existing policy may also contain terms that are valuable and cannot necessarily be replicated.

Always understand what you would be giving up before replacing existing insurance.

9. Your Life Insurance Premium Has Increased

A premium increase can be a useful prompt to review your policy.

It does not automatically mean the policy is poor value or that you should switch providers.

Premiums can increase because of factors such as:

• Age
• Stepped premium structures
• Inflation adjustments
• Increases in the amount insured
• Changes to insurer pricing

Instead of immediately cancelling the policy, review:

• Why the premium has increased
• Whether you still need the same amount of cover
• What benefits are included
• Whether your policy structure remains suitable
• What alternatives may be available

Our guide on why life insurance premiums increase explains these factors in more detail.

10. Your Debts Have Changed

Life insurance is often structured partly around the financial commitments a family would need to manage after someone dies.

Those commitments can change considerably over time.

You may have:

• Paid down your mortgage
• Taken out a new mortgage
• Cleared personal loans
• Taken on business debt
• Purchased additional property
• Increased or reduced other financial obligations

If your debts have fallen substantially, your insurance requirements may also have reduced.

If they have increased, the opposite may be true.

11. You Have Built Up More Savings or Investments

Insurance is not the only resource available to your family.

Over time, you may accumulate:

• Cash savings
• Investments
• KiwiSaver
• Property equity
• Business assets
• Other financial resources

As your financial position becomes stronger, you may become more capable of absorbing certain risks yourself.

That can affect how much insurance you need.

The aim of a review is to look at your whole financial position, not simply one insurance policy in isolation.

12. You Are Approaching Retirement

As retirement approaches, your financial priorities often change.

You may have:

• Paid off your mortgage
• Financially independent children
• More savings
• KiwiSaver available
• Fewer people relying on employment income

That may mean your original reasons for holding a large amount of life insurance have changed.

However, some people may still have reasons for keeping cover.

For example, they may want to provide for a partner, cover remaining debts or meet other estate-planning goals.

This is why reaching a particular age should not automatically mean cancelling life insurance.

Review the purpose of the cover first.