When Did You Last Review Your Life Insurance?

{4 minutes to read}  Today, I want to talk about reviewing your life insurance. Years ago, somebody said to me, “Inspect what you expect.” In the last couple of years, I have had so many experiences with people who bought life insurance but didn’t realize that their policy had a point at which it was going to expire. Many people buy term life insurance which has a specific period of time; 5-10 years or, more commonly, 15-20 years and sometimes 25-30 years. What they tend to forget is that the period of time will expire at the end of the “term and the policy will no longer be in effect.”

One of my clients, who bought a policy about 18-19 years ago, called me up and said, “I should review my policy.” What he didn’t realize was that his conversion privilege had already expired and the policy itself was going to expire in about 18 months. He could get new insurance, but it was not going to be easy for him because his health has changed and he is much older. 

Before that happens to you, give us a call, and let us know how we can help you to understand how your policy works.

Don’t make the mistake of not looking at all your options.

Many people bought life insurance policies — sometimes called universal life. When originally purchased, the performance of the policy was illustrated as interest rates were much higher. Now, because of this long period of low-interest rates, the policy that was designed to last an individual’s entire lifetime will no longer do so. Consequently, the client may be faced with either a policy that is going to be reduced in face-amount value, or will have to potentially pay a higher premium for that amount of insurance because of decreased interest rates. We can help you sort out the best options for you.

Another situation that we commonly find is that people don’t realize that new life insurance can be purchased that now also covers long-term care insurance. So, let’s say you have a policy and it doesn’t have a long-term care rider on it. You need long-term care insurance, but you don’t want to pay for a traditional policy that may never pay a claim. These new types of life insurance that include a long-term care rider might be a very, very good option for you.

Another scenario is when people who no longer need life insurance just drop or cash in their policy. There is a new market for life insurance called the Settlement Market, where you could actually sell your policy for a cash amount greater than the cash value. Even if it’s a term policy, there may be a market for that policy. Potentially a Life Settlement company may be willing to buy the policy from you and then assume the premium payments for the policy. Before you do so, ask yourself: What do they know that you might not?

Is your policy properly titled?

Policies should be reviewed for proper ownership and beneficiary designations. Too many times people make the mistake of not having the policy properly titled. There are three parties to any life insurance policy, the: 

1. Insured;
2. Owner; and
3. Beneficiary.

Making sure that your ownership and beneficiary designations are correct is extremely important.

We are here to serve and help you review your life insurance. We’d be happy to do whatever we can to give you the information you need to make the best decisions. Please give us a call.

Registered Representative offering Securities through American Portfolios Financial Services, Inc. (APFS) Member FINRA/SIPC. Investment Advisory Services are offered through G&G Planning Concepts, Inc. which is not affiliated with APFS.  Strategic Wealth Advisors Network and Gassman Financial Group are not affiliated with APFS.

Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or American Portfolios Advisors, Inc.(APA) and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors.

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