Life Insurance Isn’t Something You Should Set and Forget

Often I find that clients purchase a life insurance policy and promptly file it away and forget about it. There seems to be a negative vibe that arises when they think about or discuss their life insurance. Perhaps it feels morbid for some. But it can actually be a true life-saver for the ones left behind in the event of a premature death.

It’s important to review your insurance coverage every few years with a Life Insurance Broker

Changes in your personal situation can cause your insurance need to increase or decrease. You may also qualify for rate reductions if your health risk has improved. For example, if you no longer smoke, you could apply for a nice reduction of your premiums. If your health has changed negatively, your policy may offer options to convert to a longer term or a permanent plan. The younger you are when you exercise the conversion to permanent life insurance and lock in your rate, the less expensive it will be. Term life insurance is often implemented to protect temporary needs, like a mortgage or to educate children. The term protection offers coverage at a set premium for 10 or 20 years or longer. When the term renews, the premium can increase significantly. You will want to apply for new coverage or convert your existing policy to a permanent plan to avoid paying the huge premium increase. It’s worth having your term coverage re-quoted periodically throughout the term, as there may be a better and less expense option available today. There is significant competition between insurance carriers, who are fighting for your business. You may find you can purchase the same or more coverage for less money than when you initially purchased your current contract. An Insurance Broker can shop the market for you and ensure you find the best price for the right insurance solution. If you have a permanent life insurance policy like Whole Life or Universal Life, that doesn’t mean you shouldn’t dust it off once in a while. On the surface your policy may look like it’s providing the protection you need. But I find that many clients don’t understand the mechanics of how their policy was set up. You may have a fixed death benefit with a set premium, but behind the scenes the cost of insurance may be increasing annually. It’s wise to shift to a level cost of insurance if your policy has the option to convert. This will ensure your policy doesn’t become extremely expensive later in life.

If you are looking to reduce your insurance premiums, there may be coverage changes that can lower the cost

Paying your insurance premiums annually instead of monthly can also save you 7 – 9% per year. If you have stopped smoking, lost weight or given up a risky sport you may be able to qualify for lower premiums than you are paying now, as a result of your improved health risk. Don’t delay reaching out to your Financial Advisor or Insurance Broker. Spring is in the air and it’s a fine time to review your coverage and ensure it continues to satisfy your needs in the most cost effective way. Contact Heidi

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