When was the last time you had a life insurance policy review?
If you currently have life insurance, your agent should be doing reviews for you — we call it a life insurance policy review.
If your agent isn’t currently doing this, you ought to ask for them. You can greatly benefit from a policy review, and here’s why. As time goes on, things change. A life insurance policy review makes sure that as your life changes, your life insurance still makes sense.
1. Basic changes
You have an agent so that you don’t have to do any of the behind-the-scenes stuff. Your agent should meet with you to make sure your beneficiaries are still the same, your address is the same, and so on.
If any of these things change, you must change them in your life insurance policy.
2. Follow-up procedure
Sometimes, it just happens. We forget what the heck that policy was, and before long, we wonder why we’re paying every month for it.
Your agent should meet with you to clarify any questions and to simply go over what you have. It’s a kind gesture, and it’s something that any good agent will offer.
3. Policy overview
If you have a policy that is more complex, your agent should meet with you on an annual or bi-annual basis. He or she will go over your current cash value, what the surrender charges would be if you wanted out of the policy, and other logistical things like this.
You should be aware of how your policy is performing, especially if it’s tied to the stock market.
4. Laspe check
It happens — we’ve seen it too many times. There are some older universal life policies from the 80s and 90s that didn’t perform like everyone thought they would.
When interest rates dropped, the policy value went with it. In this situation, it’s possible that the premium you pay each month doesn’t support the current interest rates. This means you’re paying into an insurance policy that will lapse on itself.
A good agent will meet with you and check this. Your annual statement will show the age in which the policy will lapse.
5. Death benefit
When you purchased life insurance, you probably made a few calculations. How much would you need if the worst happened? We all purchase life insurance for different reasons — does your current death benefit still fit those needs?
A good agent will ask about any new assets you want to protect or any major life events that might change your life insurance needs.
6. Premium payments
There are actually situations where you may be able to get the same benefit (or better) without paying any more premiums.
It gets a little complicated, but to simplify things, you can take one life policy and use it to fund another one. There are no tax consequences, and being able to skip the monthly payments can be really nice.
How do I get started?
To get started, all you need to get started is your latest annual statement. This is sent to you each year by the insurance company. If you misplace it, you can always call the insurance company and ask for it, or you can even ask for an in-force illustration.
You can send this to your agent, and he or she will do the review for you. If your agent doesn’t offer policy reviews, our office will gladly do it on his or her behalf.
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