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Remember to Get Your Annual Insurance Policy Checkup

There are many things to consider when purchasing life insurance, but there are also things that should be reviewed after your purchase. Consider an annual policy checkup with your financial advisor to make sure your policy is still in line with your goals.

Ask yourself why the policy was originally purchased? Then, ask if any of these insurance needs have changed since then:

  1. Occupation
  2. Income
  3. Tax law
  4. Marriage or divorce
  5. Births and or deaths
  6. The insured’s health

The Only Certainty in Life is Uncertainty 

Regularly reviewing your life insurance policies keeps your coverage up to date with you and your family’s needs. Ongoing reviews of your investment accounts allow you to make periodic adjustments based on your changing circumstances. The same should be done with your life insurance. 

Zach Rosen, from Underwriters Brokerage Services, suggests eight things for policyholders to consider:

(1) Who owns the policy?

Understand the implications of whether the policy is owned by an individual, business, or trust

(2) Who are the beneficiaries?

Determine whether the proceeds are payable to the correct person or entity/trust listed

(3) What are your current objectives/goals?

Verify if your policy is matching your current objectives/goals. Protection amount could be inadequate relative to family income needs, business obligations or tax impact

(4) If term insurance, is it still convertible? Term insurance may have a limited conversion option that ends prior to the term period itself.  A check of conversion status can be a financial life saver for someone with health changes

(5) Is the policy’s performance is less favorable than expected?

What were the original assumption on the policy performance compared to the actual performance?  If policy has under performed then the policy could lapse in the future

(6) Are any outstanding loans accruing on the policy?

Outstanding loan balances can dramatically impact policy performance and even create a significant tax liability

(7) Are there additional features that could be beneficial? 

Extended guarantees and long-term care riders are now widely available

(8) Are the premiums still cost efficient?

A new policy could provide better coverage with the same or lower premium cost

New mortality tables, changes to underwriting guidelines, and changes in health/lifestyle are a few items that can affect your premiums.

Don’t Wait to Review Your Policies

Financial advisors and clients must include life insurance as part of the annual review process. When you have the right amount of coverage in place for you and those you care for, there is less to worry about.

As we learned from the COVID-19 pandemic, so much can happen in 12 short months. Make sure your policy is right for you and your family.

Please reach out to your financial advisor to assist you with the insurance review process. It all starts with a conversation centered on these very questions. If you do not yet have a financial advisor or are considering a change, contact us at Hefren-Tillotson today. 

We would be happy to help.

DISCLAIMER: Past performance does not predict future results. This report is based on data obtained from sources we believe to be reliable. Hefren-Tillotson does not, nor any other party, guarantee the accuracy or completeness of this report or make any warranties regarding results obtained from its usage. All opinions and estimates included in this report constitute the firms judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation to buy or sell the securities herein mentioned.

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