If you currently have life insurance, you may think that there is no need to review it every year, but if you don’t review your policies, you may be missing out on some big opportunities. Often, people think that there are no options on their policies after they have been issued, but that is far from the truth. Changes in your family life and finances may warrant changes to your policies. In addition, there have been big changes in the life insurance industry that may be available for you to take advantage of.
The first reason to review your policies is for general maintenance. It is a good idea to check with your financial advisor every year to confirm that the beneficiaries on your policies are up to date and correct. Research has shown that 30 percent of all life insurance policies have incorrect beneficiaries. Your annual review is also a great time to see if you may be able to improve your rate class. Quitting smoking, losing weight, and improving your cholesterol and blood pressure may increase your rate class and lower your premiums. If you have a permanent policy, check on the performance of your cash value and death benefit so that you are up to date on the current values of your account. Also, be sure to ask about your dividend option. You can use your dividend to build up the cash value and death benefit amount, offering your family greater financial protection in the event of your death. If you have a loan against your policy, you may be able to use your annual dividend to pay down the loan and loan interest.
The next reason to meet on your life insurance is to make adjustments for family, life and financial changes. Some great examples are having children, buying a home, getting a new job or retiring. All of these life changes may warrant an additional need for life insurance or changes to your existing insurance. The birth of a child is also a great time to look at purchasing permanent insurance on your child. Not only will it lock in a low premium for your child, but it will also ensure that he or she is covered in the event that they become uninsurable. Plus, when the child is an adult, they will be able to draw from their policies to help fund their schooling, buy a home, or start their own family.
Finally, now is a better time than ever to look at your options on possibly replacing your existing policy for one with increased benefits. Rates are lower than ever and there are a variety of new options that can enhance your benefits. If you have a term policy, you may want to look into a Return of Premium product, which refunds up to 100 percent of the premiums paid if the insured does not die during the term of the policy. If you are interested in a permanent policy, be sure to look into the Long Term Care benefit that many companies are now offering, which pays out a portion of your death benefit to cover long term care costs while you are still alive. Many companies are now also offering indexed policies that are tied to the market, so that the client can enjoy larger gains when the market is up, without experiencing a loss when the market is down.
By reviewing your life insurance policies and options, you are securing the financial future for your family. Don’t be afraid to get a second opinion, as everyone’s situation and needs differ. It’s important to ensure that your financial advisor doesn’t take a “one size fits all” approach. Ask about your options and get a few quotes to be sure that you are maximizing your benefit for your premium. FBN