It is important to periodically review your life insurance policy. Especially important if your policy is older then 10 years or if the specifics of your coverage aren’t as clear to you as they were when you purchased the policy. Typical reasons for a professional review evolve around changes in your life:

  • change in marital status
  • taken on debt (mortgage) or reduced debt
  • changed jobs or taken on more responsibilities
  • a new “empty-nester”
  • need for income protection has changed

The Rest of the Story

Beyond the traditional reasons for reviews, today’s investment and interest rate environment creates a much more precarious situation for older policies. Consumers need to be aware that many older policies, and policies that have gone unattended, have internal deficiencies that can prevent intended benefits from materializing. In other words, many policies are in jeopardy of lapsing or simply running out.

Continued Low Interest Rate Environment

Life insurance policies generally rely upon paid-in premiums, built up cash values, and the insurance company’s ability to invest appropriately (and successfully) to maintain the effectiveness of the policy. Given the continued low interest rate environment, certain policies are unable to provide the original benefit unless additional premiums are added. Sometimes the fix looks as simple as that — add more money.

Obvious Answers Aren’t Always Best

New forms of life Insurance policies have gotten much more efficient, offer better coverage, and often times at a lower premium. In fact, in our experience, many older policies are excellent candidates for improvement without the client adding more money.

“I Would Expect My Agent to Call Me”

According to Trusts & Estates magazine, life insurance carriers estimate that 70% to 95% of all policies have no servicing agent. Many elements contribute to this — mobility of our society, turn-over of insurance agents that may move from one firm to another, and death or retirement of agents causing policies to become “house accounts.” Sometimes the agent isn’t there to make the call.

Not Exactly Sure What Coverage You Have, or How Much

It’s easy to lose track of your life insurance – you may have bought from different sources, received coverage from an employer, or added some for a mortgage requirement. Some smaller Insurance firms have changed names or merged operations. Over the past decade, some insurance firms may have even sold your policy to another firm. In the end, you may be paying premiums for insurance you simply don’t need.

At Wolfson Financial Services we offer an independent, 3rd party review of your life insurance policy. There is no charge for this service.

Our professional policy review covers a two step process:

Step One, Policy Summary

  • Policy Type
  • Death Benefit
  • Planned premium
  • Owner
  • Beneficiary
  • Riders
  • Is policy currently offered for new issue

Step Two, Policy Comparison

We look at similar policies, alternatives and industry standards. Simply stated, is the policy meeting its stated purpose (income replacement, debt reduction, cash accumulation)? We consider simple changes in an effort to substantially improve the policy’s performance.

Upon completion of our analysis, you will receive a detailed report presented in an easy to understand format, revealing exactly what coverage you have as well as any deficiencies.

If you wish to have your policy reviewed, please contact our office at (315) 449-4730.

Conveniently located in Central New York state, Wolfson Financial Services is a financial planning and consulting firm dedicated to helping individuals, families and organizations reach their financial goals. If you have questions about this article or if you would like to become a client of Wolfson Financial Services, please call (315)449-4730.