In my role, I often work with clients who have a variety of life insurance policies collected over the years in their financial portfolios. They’ve invested in these policies as an act of love and protection for those they will leave behind and it’s important to find out if their life insurance policies are still serving their needs.
These policies can range from long-held plans spanning decades to newer policies, and when all of them are combined, they may still not carry enough coverage. It’s also not uncommon to find policies with escalating premiums or those where beneficiaries haven’t been evaluated in years. It can be overwhelming to stay on top of it all.
Meanwhile, with estate taxes on a path to rise for many and the current limits sunsetting in 2026, your insurance strategy is more important than ever.
So, if you’re wondering if it's time for a review with your financial advisor, start by asking yourself these questions.
- Have your financial situation or goals changed?
Changes in your income, debts such as mortgages, education needs for your loved ones, and family structure can impact your insurance needs. Also, consider whether you’ve made new financial goals or investments that might necessitate adjustments.
- Have your premiums risen lately?
Premium increases can be due to factors like age, health changes, or market adjustments (like inflation), and it’s essential to understand if these hikes align with your expectations or indicate a policy issue. Your advisor may be able to help you find policies with similar or better coverage for less.
- Do you have enough coverage?
Our coverage needs can feel like a moving target. The DIME method is a simple way to figure out how much you should aim for:
Debt + ten years of Income + Mortgage payoff amount + the cost of your children’s Education = The dollar amount you may need
- Has it been a while since you reviewed your beneficiaries?
It’s amazing how many major changes happen in life — marriage, divorce, remarriage. Children and grandchildren are born. Loved ones pass away. But people often get too busy to reconsider beneficiaries. Here are a few reasons to review them:
- Your money may not go to your intended recipient
- Your will won’t always control who receives your death benefit
- You may have forgotten to add (or subtract) a beneficiary
- Your beneficiary may be hit with a larger tax bill than necessary
- Are you worried about the estate tax rate changes?
With the upcoming sunsetting of the estate tax limits, it’s unclear how much more your loved ones may incur in taxes upon your passing. Insurance payouts to your beneficiaries are often tax-free, which is extremely helpful.
Why a Holistic Policy Review Matters
A life insurance policy review isn't just about checking boxes. It's about confirming that this vital component of your financial plan is healthy, robust, and in line with your current and future goals. A comprehensive review process focuses on:
- Evaluating policy health and alignment with your goals
- Identifying and addressing any potential issues or changes
- Recommending optimizations to enhance policy performance
Over 70% of policy reviews uncover important issues, which goes to show how vital it is to stay on top of things.
With life expectancies rising, it’s also critical to think long-term. For instance, we often find that non-guaranteed universal life or term policies are being used in estate planning, which can be problematic. Instead, it’s important to evaluate the benefits that can extend to the age of 120.
With our latest insurance service expansion and partnership, we help make sure your policies are actually working hard for you — all while keeping costs in check. Life insurance is a living, breathing part of your financial strategy. Let's make sure it (and all your financial tools) evolves with you. Contact us today to start your complimentary, no-obligation policy review.