The Benefits of a Policy Review

| September 26, 2016
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You’ve heard the old saying; the only certainties in life are death and taxes. 

Well, that’s one way to get into the conversation about life insurance.

We’ve often heard no one wants life insurance, but they do want the benefits of life insurance.  That’s natural.  But, when was the last time a professional advisor took the time to focus on how to deliver those benefits to you and your beneficiaries in a way that was practical for you?  This is an insurance policy review and part of how we deliver service to our clients.

The soundness of your life insurance plan depends on a few questions that concern us all the time:

  • Have your life circumstances changed? If there have been significant changes, your plan may no longer be adequate.
  • Do you know when your term insurance will expire? Term insurance is just that, for a limited period of time.  Are you approaching the termination of your term insurance?  Are your assets sufficient to take care of your loved ones as you’d planned when to bought the policy?
  • Has the policy performed based on the original expectations? For many cash value life insurance policies, the expectation of the crediting performance in the cash values may not have been as good as expected.  When was the last time you received an inforce illustration which helps to stress test the policy relative to the premium you’re paying?  Did you know it could lapse if you don’t pay enough premiums to overcome the costs eating into the cash values?
  • Was the policy issued with a health rating that may have changed? Sometime, a certain health condition was observed and the insurance company said that you can get reassessed for a better rating if the condition improved.  A clear example is smoking.  Are you now a non-smoker able to get a better rating?
  • When was the last time you checked the beneficiaries on your policies? Maybe an ex-spouse is still the beneficiary of your policy.  Have you done some estate planning that would suggest a change in a beneficiary but your agent never got that done for you?
  • Do you have a loan on your policy? Great idea if done prudently but you should monitor the loan relative to the ongoing cash value in your policy.  The last thing you need is for the loan to overcome the cash value creating a potential tax surprise.
  • It appears that 70% of us will be writing big checks to pay for long term care costs that are not covered health insurance plans. Are you prepared for this?  As it turns out, many life insurance programs offer the ability to use the life insurance for long term care costs, sometimes turning a dollar into more than a dollar when used to offset long term care costs.

These are just a few of the circumstances we’ve seen and where we’ve been able to help current and new clients through a policy review.  This takes very little time and is complimentary.

If you want to know more about a policy review, call  Security Financial Management at 407-740-6553.

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