Will your life insurance policy take care of your family when they need it the most?
By Jordan Loebel, Asset & Income Protection Advisor
Life insurance is not meant to be a static element of your financial portfolio. Like all your investments, it requires maintenance to have optimal performance. You may be under insured. Or you may be overpaying due to changes in your lifestyle and qualify for better rates. Either way, it is critical to your family’s financial stability to regularly review your policy as your life evolves.
5 Signs Your Life Insurance Needs Have Changed
Most workers take less time researching their benefits options (30 minutes) than they do shopping for a television (two hours). In 2018, the cost of healthcare for a typical American family of four, covered by an average employer-sponsored preferred provider organization (PPO) plan, was $28,166, according to the Milliman Medical Index (MMI). That is quite a bit more than your average TV!
1) Your Goals For the Policy Have Shifted
Chances are your life has changed quite a bit since you first purchased your policy. As you go through life, there are situations in your personal and professional life that will shift your desired performance of your life insurance policy. Some common examples are:
- Your income and/or benefits package has changed
- Your children have grown up and the financial support you wish to provide them has changed
- You sold your business or bought out a partner, eliminating the need for key person or buy-sell insurance
- Your needs for income protection have switched towards long term care
- Your estate tax liability has changed
2) You've Improved Your Health and/or Safety Habits
Engaging in high risk actives or unhealthy life choices can negatively impact your life insurance rates. Making positive health or lifestyle changes may significantly improve your policy costs.
These changes include:
- Discontinuing tobacco products
- Achieving a healthy weight
- Quitting a high-risk hobby such as sky diving, bungee jumping, racing, or scuba diving
3) Your Family is Growing
Exciting milestones like celebrating a wedding or expecting the birth of another child come with an enormous amount of pressure to provide for your family. It is important to review your policies so they are aligned with your family and family’s needs.
Speaking of changes in your family…Regularly reviewing your beneficiary designations will ensure that if something were to happen to you, the payments are distributed according to your wishes.
4) Rates Have Fallen, But You're Locked in at a Higher Rate
People are living longer, algorithmic underwriting and tech innovations are lowering carrier expenses, and expanding competition in the marketplace are all resulting in lower life insurance premiums.
Having your advisor review your coverage and benchmarking it against other carriers will help determine whether there may be more competitive options available that could increase your disposable income.
5) The Cash Accumulation of Your Policy is Under-performing
With the changing interest rate environment, many policy owners are discovering their policies are under performing expectations with respect to cash accumulation. This can be a serious problem for policy owners expecting to supplement their retirement with the cash values accumulating inside the policy.
What to do if you think you a change is necessary?
Get in touch with a trusted advisor to discuss the structuring of your life insurance strategy. To request a review from our team of experts at BKS, contact our BKS life insurance advisor to receive complimentary guidance.