Importance of reviewing your current insurance coverage
When you purchase a permanent life insurance policy, you are purchasing a financial vehicle that is designed to last a lifetime. Yet a policy is often tucked away and forgotten, with no thought given to evaluating ongoing performance. This is unfortunate because a permanent life insurance policy is unlike any other financial vehicle. Its strength relies on many constantly changing variables, including the investment returns on premiums paid to the carrier, internal expenses, and assumptions about life expectancy related to health indicators.
Essential components to understanding your insurance:
- Type: Do you know what you own?
- Structure: How does your policy work?
- Performance: How is your policy performing today?
- Reason: What is the goal?
- Unexpected or life event: Do you have coverage if you become disabled or ill? Have you recently experienced a life changing event?
- Beneficiary: Is this current and accurate?
- Protection: Is your policy a protected asset?
If you’re unsure about the answers to the questions above, we are here to help you! Our team can provide a thorough policy review to ensure it’s economically efficient and meets your current needs.
Four main reasons for a policy review:
- Your needs may have changed – As your financial goals and objectives evolve, a financial professional can assess your current needs and recommend policy options that better align with your situation.
- Improved mortality – Because people are living longer and mortality costs have decreased, your policy (especially purchased before 2009 or 2019) may be outdated and costing you more than necessary for the same coverage.
- Economic changes – Financial trends like market returns and interest rates impact how cash value policies are funded and perform over time, so regularly reviewing updated policy ledgers helps ensure your coverage stays on track.
- Term length – In addition to permanent life insurance, it's also important to review term life insurance policies to consider factors like the remaining term length, conversion options, and changes in your financial responsibilities to ensure it's still meeting your evolving needs.
Policy review highlights:
- Receive an evaluation of how the policy has performed against your initial goals
- Reflect on how your goals may have changed and how your policy or policies fit your future plans
- Understand what options may be available to improve your current position (i.e., lower premiums, add a long-term care rider1, etc) or better meet your changing needs.
A policy review allows you and an insurance professional to review your current policy to determine if it is performing as expected. No matter what sort of life insurance policy or policies you have, you have nothing to lose and potentially much to gain by allowing your policies to be evaluated.
1Policy riders are available at an additional cost and may not be available for all products or in all states. Terms and conditions apply.