I often talk with Clients about their life insurance program. Some people have life insurance for estate planning, others for business continuation and still others for survivorship planning. In all cases I strongly believe that having a life insurance review process in place for all policies that are over five years old is important.
Some of the reasons for this review process are:
- Insurance companies have good and bad runs. You don’t want to be with a company who is having a bad run.
- The interest rate assumptions you used when you bought your insurance may have changed. If interest rates have dropped you might be in danger of having your insurance lapse or having a large future price increase.
- The insurance companies might have come out with a newer product that better fits your needs. Insurance companies are constantly developing new ways of funding insurance. Sometimes these new ideas make a lot of sense.
- The cost of insurance you’re paying for has decreased. If you have an old policy, there is a good chance that you could reduce the amount that you pay for your life insurance.
- Your life insurance needs have changed. Your personal situation might have changed and the policies that you’ve had in place can be changed to fit your new circumstance better.
We find that people often buy an insurance policy and then ignore it. I believe that it’s important that when you buy a policy, you not only pay attention to it, but have it reviewed every five to seven years. Within that time frame, too many things can change. Not having an insurance review can potentially cause a great deal of pain if your policies are not managed well.
I’m always interested in your comments. Because we are a regulated site, we can’t have a comment box. So, please give us a call or send me an email. I’m interested in what you’re thinking about your life insurance program.