The frequency which you should review your life insurance program will depend in large part on the type(s) of policies you own. A program that consists entirely of term products will not have to be reviewed as often as one containing permanent products, but that doesn’t mean it can be ignored.
Regardless of the types of policies owned, you should review your life insurance portfolio every time you experience a significant change in your life. This would include such events as getting married/divorced, having a child, changing jobs/getting a promotion, buying/selling a house, and starting/selling a business. Any of these events could necessitate a change in coverage and/or a change of beneficiaries.
Other than at the occurrence of one of the aforementioned events, a portfolio consisting entirely of term insurance doesn’t need to be reviewed very often. However, it is very important to know when the conversion provision expires. In the past, most term policies were convertible for their entire level period, i.e., a 20 year level term policy was convertible for 20 years (or at least until age 65), but I’m seeing more and more term policies that have a limited conversion period, the most common one being 10 years.
Whole life policies should be reviewed annually and certainly no less than bi-annually. Most whole life policies are sold on some type of flexible outlay basis that is highly dependent on dividends. But dividends are not guaranteed, so the actual has to be compared to the projected to make sure there are no surprises down the road. Universal life policies don’t pay dividends, but are interest rate sensitive, and should be reviewed as often as their whole life counterparts.
Variable life policies are dependent on market performance, and should be reviewed every year. The attractiveness of variable policies is that they usually require a lesser outlay than whole life, provided they perform at a certain (sometimes unrealistic) level. As a result a good portion of variable life policies are underfunded, and if not reviewed early and often enough, could lapse. This is exactly the situation that many policyholders who procured variable life in the early to mid ‘90s now find themselves.
If you have taken the time to buy life insurance, you owe it to yourself to review it periodically to make sure that it is still performing as you originally intended.