Four Reasons for an Independent Insurance ReviewUnlike investment portfolios which are reviewed on a regular basis with a well-informed and trusted advisor, insurance is not commonly reviewed with any frequency, much less with an insurance professional. This is a big mistake. Here are four good reasons why your insurance policies should be reviewed every couple of years.
Reason Number 1: Cost Savings
Since policies are infrequently assessed, it is not universally known that the cost of insurance has significantly declined in recent years. According to the nonprofit Life and Health Insurance Foundation, the cost of basic term life insurance has decreased by nearly 50% over the past decade. This means replacement policies for some individuals is a smart idea. Other premium costs have gone down as well and for those who need more coverage because of changed circumstances, it is now possible to get better coverage with better benefits at the same cost of policies written several years ago.
Reason Number 2: Manage Risk
The fact is life is full of risks e.g. chronic illness, serious injury, outliving assets, early death, and so and so on. Most of us put these disturbing thoughts out of our minds because they are unnerving, to say the least. Being both a consumer and an insurance advisor, I can assure you that it is much less stressful when these risks are brought out into the light of day, assessed, and then dealt with at an appropriate comfort level. This is especially true since there are many cost-effective solutions now available. You can even get "two for the price of one." I am referring to the brand new combo products that are either a life insurance policy or an annuity that have a guaranteed long-term care benefit. Even if you are not interested in these particular new products, the point is that there are many ways to minimize your exposure if you are so inclined.
Reason Number 3: Market Place Changes
The impact of market fluctuations on insurance products should not be underestimated. The impact cuts both ways: to consumer’s advantage and disadvantage. To your advantage in terms of lower costs and true innovations including inflation-proof clauses, streamlined options, enhanced features, combined benefits, to name a few. But market changes have also had a negative impact, especially because of lower inflation rates. There are many owners of policies written 15, 20 or more, years ago that are in jeopardy of being underfunded. Unknown to some of these policy holders, their coverage could actually expire leaving them with no benefits when they are needed most. If you have a universal or whole life policy written several years ago, and have not checked into the current values, you need to have it evaluated.
Reason Number 4: Keep Up-to-Date with named Beneficiaries
One of the easiest and often neglected ways to secure financial security is to update the beneficiaries named on insurance policies. Typically, the actual policy paperwork is filed somewhere "safe" which means that it ends up buried in a safety deposit box or the back of a file cabinet. So it is unfortunate but understandable how this information is not kept current. Owners are often shocked to see that the beneficiary of their policy is a former spouse, a deceased family member or realize there is now a glaring omission. Of course the real shock occurs after the fact when it is too late to correct. A simple preventative step could avoid mayhem, emotional drama and unintended economic hardship. Checking the named beneficiaries on all your policies to make sure it is aligned with your wishes is usually the first step of an insurance review. Contact us today for a complimentary, professional insurance review and for more information.
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