Broker Check

Review your insurance policies

June 08, 2016

One of the many issues that we don't want to deal with is our own mortality. However, there are many good reasons to review your life insurance coverage, and some of your life goals may be met by doing so.

I Already Have Insurance... Why Do I Need To Review It?

It is a good general rule to review your life insurance whenever some significant change happens in your life. Some examples (and there are many more than those listed here) are the birth of a child or grandchild, purchase or sale of a house, partnership in or dissolution of a business, divorce, retirement, children becoming independent (they actually do that on occasion!), or even a job change where insurance coverages are lost or gained. Whichever the change, here are some reasons that a review can be beneficial to you:

  • The beneficiary designations may need to be changed in some way, including naming contingent (i.e., back-up) beneficiaries. We have seen many times where this is neglected and then it is too late to make the change.

  • You may have too much or too little insurance to meet the current and expected estate and family goals, such as paying inheritance tax for your heirs, covering college tuition for your children or grandchildren, the desire to leave a legacy for a charitable organization or special needs relative, or the need to plan for income in retirement. On the other hand, you may owe nothing on your home now and therefore don't need coverage for that debt.
  • Your medical condition may have improved or deteriorated. In either case, you may have policies that can be upgraded, or a policy conversion feature that may allow you to hold onto your coverage without the need for a physical.

What Does A Life Insurance Audit Involve?

First, let me state that there is no cost or obligation to you for our firm to do a life insurance audit, except your time. Here is what is entailed:

  • You gather together the various insurance statements and other relevant financial information;

  • You meet with us to discuss what you have, your current financial and personal situation, and most importantly, what your overall goals and plans are going forward;

  • We evaluate the information based on your stated goals and our knowledge of the tools available to accomplish those goals, including:

  • Taxability of existing and alternative insurance and how that fits your particular needs,

  • Adequacy of the current coverage based on your needs and goals,

  • Cost of the existing policies vs. the alternatives;

  • You meet with us to discuss our assessment and recommendations (note that we may determine that your coverage fits your needs already), and

  • We implement the plan.

We will be happy to help you with this. Let us know when you would like to open a discussion.

by Ronald Donato, Jr., CFP®, MBA
Director of Financial Services