7 Reasons to Verify Your Life Insurance
Life insurance is rarely, if ever, thoroughly and objectively reviewed by most of the professionals who sell the product. The insurance industry estimates less than 10% are regularly reviewed. This results in severely underfunded policies, incorrect beneficiary designations, and estate tax generating ownership designations. This is not a rare occurrence! This is a significant problem. The process is somewhat labor intensive and requires patience. When a person purchases a life insurance policy there are a myriad of details that are explored. These include items that are dependent on things that change with the economy. The recent upheaval in the financial markets has had a sudden, significant, and lasting impact on most in-force permanent life insurance policies. They have put many of these policies on the path to expire without value even though tens or even hundreds of thousands of dollars of premiums were paid. Not being aware of these issues can lead to significant premium increases to rescue the coverage, or even worse, lapsation. Listed below are seven reasons to have your policy reviewed and verified.
1. Potential Underfunded Policies
Most policy pricing is based on certain assumptions about policy charges, interest rates, planned premiums and other issues. Policies are usually designed with enough planned funding to stay in-force until at least life expectancy. Unfortunately, with today’s lower interest rates, more and more policies are underfunded, causing huge “catch up” payments to stay in force. This issue can be avoided with minor adjustments if caught early.
2. Interest and Financial Market Changes
Extended periods of low interest rates have affected policy performance and may require more premium dollars to meet policy charges. Low interest rates severely affect not only policy duration, but cash accumulation.
3. Verify Financial Strength of the Carrier
With the recent economic catastrophes it is beneficial to verify the financial strength of the companies guaranteeing the death benefit and cash accumulation.
4. Legislative Changes
Regulatory changes to state and/or federal estate tax laws may have a tremendous effect of a policy’s performance after taxes. Ownership and/or beneficiary changes may be indicated to solve this issue.
5. New Efficiencies in Product Pricing
A new lower mortality table, medical advances, longer life expectancies and improvements in underwriting technology have significantly impacted product pricing.
6. Loans, Withdrawals, or Other Policy Changes
Loans, withdrawals, skipped premiums, quick pays, or other policy changes may have an effect on policy performance.
7. Lifestyle Changes
Changes in family, financial, or business status may affect ownership, beneficiary, or coverage needs.
To have a complimentary review of your policy, contact the offices of Integrity Advisory Group. Mark Brake and Joe DiPaolo are willing to take the time to sit with you and see if your estate is affected by anything mentioned above. Messrs. Brake and DiPaolo can be reached at 813-639-4200. Offices located at 2202 N. Westshore Blvd, suite 200 Tampa, Fl 33607.
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