How To Perform A Life Insurance Review

Why it Matters:

  • Life is always changing, and so are the needs of your coverage..
  • Having a full-picture understanding of your financial life can help you determine the exact coverage you need in case of the worst.

Do you have adequate life insurance protection should the unexpected happen?

While many will regularly review their financial goals and investments, many typically forget to update their life insurance coverage. Others often wrongly assume their current life insurance policies are sufficient and appropriate for all the stages in their lives. But, as everyone knows, life happens, and new protection options change over time, and that’s why a periodic review of your family and financial situation is so important. 

Prospect checklist

Some life changes are more likely than others to create financial vulnerability. Here are a few questions to ask yourself to discover circumstances that may have changed since you last reviewed:

  • Are you recently married or divorced?
  • Have you had a baby?
  • Have you experienced the death of a spouse or child?
  • Have you purchased a home?
  • Has/have your life insurance policy/policies ever been reviewed?
  • Are you currently a business owner, or recently started or sold a business?
  • Have you recently received an inheritance?
  • Do you need to plan for retirement or fund college education?
  • Do you support anyone with special needs or an elderly family member?
  • Has there been a change in employment or salary?
  • Have any children left or returned to the household?

Three simple questions to ask

Most people need help to determine if their current coverage is still adequate or to estimate how much life insurance they may need at this time in their lives. Plus, you’ll want to discuss how the death benefit proceeds are to be distributed to their beneficiaries. Here are three simple questions to get you started:

  1. If you died today, how much would your family need to cover the funeral, any medical bills, and other immediate expenses?
  2. How much income would your family need each month if you passed away, and for how long?
  3. Do you need to structure a plan for payment of the death benefit to your beneficiaries?

Other important areas to think about:

  • Do existing policies coincide with current goals?
  • Term life policy premiums may be about to increase.
  • Do your long-term goals require a permanent life insurance policy?
  • Is there a need for more flexibility in your life insurance policy?
  • Is the client interested in additional features such as a long term care rider or living benefits?
  • What is the current insurer’s financial strength rating?

Five steps to conducting a life insurance review

  1. Get copies of your current policies.
  2. Determine the face amount, cash value, annual premium, surrender period, amount of any outstanding loans, and ownership and beneficiary information.
  3. Review the questions from the prospect checklist above to see if any life changes affect the amount of coverage desired.

If the old saying “the only thing constant in life is change” is true, it’s all the more reason to make sure you’re periodically reviewing your coverage needs appropriately.

If you’re ready to ensure that you’ve got a life insurance policy that works for you, then let’s get started. Call us at (800) 822-8045!

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