Of the many financial instruments that make up a portfolio, life insurance policies tend to be the least monitored. Many people have policies that have not been reviewed since the policies were purchased several years ago! Like any other financial tool, life insurance policies need to be managed and adjusted to keep pace with market conditions and with the insured's evolving needs and goals.
Here are some common problems:
Regards,
Marc & Ed
Here are some common problems:
- Among-st older permanent policies, many are underperforming and are severely underfunded. If action is not taken, the policy will eventually lapse.
- The policyholder was a smoker when the policy was issued but has since quit completely. The premiums still reflect the smoker classification, which can be double in many instances!
- Many are paying high premiums for a permanent policy that is not accumulating cash value at a desirable rate.
- Many have experienced life changing events that have drastically changed their insurance needs from the time that they purchased their policy
- Many have very short term policies such as a 10 year term. They are almost sure to outlive the policy but will pay a much higher rate at the end of the term to extend it. In some cases a 10 year term is a good fit but in most cases a 20-30 year term is much more suitable.
- Has my policy been reviewed in the past 2 years?
- How many years is my term policy for and when will the term end?
- Am I content with the cash accumulation performance of my permanent policy?
- Has my life situation changed significantly since I began my policy?
- Have I spoken with my agent about the possibility of converting my term policy to a permanent policy?
- Have I learned about how a life insurance policy can be one of the most effective vehicles for a retirement plan? If you are paying into a 401k or similar plan, you need to pay attention to this one!!
Regards,
Marc & Ed
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