Will Your Life Insurance Policy Die Before You Do?

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Most business owners spend hours monitoring the important things in their lives. Things like employee payroll, inventory management, and equipment maintenance all get done because the consequences of ignoring them could be costly. What many people don’t realize is that their life insurance should be regularly reviewed and managed as well.

When was the last time you reviewed your life insurance program? Changes in interest rates, loans, or premium payments over the years can all impact the performance of a policy. You may not be aware of it, but a policy can lapse even if you’ve made all your premium payments. The reality is the average consumer doesn’t have time to understand how their life insurance policy really works or how it’s performing over time.

Without regular review, it may be difficult to answer important questions about your policy. For example:

  • Has the policy’s crediting interest rate changed?
  • Have you ever missed or changed the amount of a premium payment, not received a dividend, or taken a loan?
  • Do your beneficiary designations avoid taxable consequences?
  • Most importantly, do the amount of coverage and purpose still match your goals?

Without knowing the answers to these questions, it’s hard to know if your policy will be there when you need it. Your policy may be performing very differently today than what you expected based on illustrations you received when you purchased the policy. So, what’s the solution? Consider an annual life insurance policy audit. A policy audit is simply a review of your existing coverage and needs. The goal is to identify any gaps in your insurance program and take any corrective action that may be needed.

To begin a life insurance policy audit, the only thing you need to do is gather your information — including your current policies, your last annual statement, and any inforce projections you have — and share it with your insurance advisor. A good advisor can provide the following to make sure your coverage still meets your objectives:

  • An analysis of your policy’s current and projected performance
  • An understanding of current riders and benefits
  • Potential coverage and premium options depending on performance

You already allocate significant resources toward your insurance plan. Isn’t it worth a few minutes to make sure your policy meets your needs and will continue to be there when you need it? To help avoid unexpected surprises, take the steps to review your policies today.


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