We all know how much life is full of change. We put in guardrails to bring stability to our lives, but sometimes we need to renew them. We pay premium into life insurance policies, but sometimes policies that were bought several years ago need to be updated to provide the protection desired now and in the foreseeable future. The initial reasons for purchasing a policy have likely changed, incentivizing one to engage in a policy review. To begin the process of a policy review, contact your insurance advisor and ask for a policy review is important to make sure that your current insurance policy is still up to date. Here is a simple step-by-step process on how to go through a policy review.
Step one: Set up an appointment with your insurance advisor, who can be the original agent or another insurance advisor that you trust. Most likely, this appointment should be brief and can be over a phone call, virtual or in-person.
Step two: When you start your appointment with your insurance advisor, here are some of the key areas you will want to assess. Is the amount of the existing policy still in line with your current and future needs? Have some of the policy features and benefits become obsolete or are others now more attractive? For example, if there has been a change to your health, you may
need to pay close attention to either the “conversion” privileges in a term policy or confirm the underlying guarantees to ensure that your policy will last as long as you need it to. Some policy benefits lapse or become out of date if more than ten years have passed since the policy was purchased. Becoming aware of these potential changes can be an invaluable benefit of policy
review.
Step three: Another important step of the policy review process is making sure that your desired beneficiaries are protected. If one of the beneficiaries on your policy is deceased or a former spouse, it will be necessary to have your beneficiaries changed to avoid potential problems. If there is a new person that you want to become listed as a beneficiary, it will be important to have them formally added as a policy beneficiary. In addition to evaluating the beneficiary status, it is just as important to confirm that the ownership status is consistent with your overall strategy for your foreseeable future. Working closely with your insurance advisor and financial planner can help navigate these challenging issues and avoid unintended mistakes.
Step four: Just like the needs you want to protect, the insurance marketplace changes and evolves. There may be new policy features and benefits that are available today that weren’t available when you originally purchased your policy. A real example of this in today’s marketplace is the evolution of “Hybrid” policies that blend life insurance and Long-Term Care coverage. These policies have been gaining in popularity and reflect how the marketplace is trying to keep up with client needs. Asking your insurance provider about alternative benefits and policy recommendations is essential. You may need to have your current underwriting status evaluated prior to applying for new policy benefits. Having access to an easy way to evaluate your underwriting status can be very beneficial before going through the formal application process. The insurance advisor will be happy to help and give recommendations that will work for you and your beneficiaries.
Step five: Think about your options and see whether or not they fit your policy goals. If you are approaching retirement, paying for a child’s college tuition, or just paying off your house, then you need to make sure that the policy changes that you may be making complement those goals. With life constantly changing, you need to make sure that your life insurance policy
changes with your needs. The life insurance policy review, with this specific sequence of steps in mind, provides the stability that you need from that policy amongst your life changes. This process helps rebuild the proper safety net you need in order to achieve your goals in life.
If you have questions about the benefits of a policy review and would like more information, the experts at Acru Insurance, LLC is glad to help.
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