Evaluating Your Life Insurance Policy
I received a phone call the other day from a client I have worked with for about thirteen years now. We have touched based over the years to make sure any life changes have been addressed. The reason for her phone call last week was to address her term life insurance policy. When the policy was taken out, her main concern was providing enough money for her son to pay off the house and for burial expenses.
With her term policy nearing its end date in two years, she has been re-evaluating her coverage. Her home is very close to being paid off, so this is no longer a big concern and her son has become more successful over the last decade, so leaving a large sum of money for him is no longer necessary in her eyes. Now her biggest concern is just making sure her funeral and burial expense are covered.
Everyone needs to evaluate their life insurance policies on a regular basis with their agent to determine if it still meets the needs that it was set up for. We also need to address life changes like birth, death and divorce. This will usually involve changes in coverage or beneficiaries. A common change we look over is changing beneficiaries after divorce and getting re-married. Very often the ex-spouse ends up receiving the life insurance payout. This would also be the time to change beneficiaries on retirement and investment accounts.