By Antonio Porretta
When you consider everything on your plate, a life insurance review isn’t usually the top priority. Most of us purchase a policy and then forget about it, thinking we have done our due diligence and crossed it off the financial responsibility to-do list.Â
But a life insurance review, as unexciting as it sounds, may be necessary and beneficial. Life insurance is not supposed to be a set-it-and-forget-it financial product. It’s great that you have a policy, but how can you know it’s working for you if you don’t check in every once in a while?Â
Best practice suggests reviewing your life insurance policy every year. Whether that’s a quick review of your financial situation and family circumstances or an in-depth analysis of your policy and its benefits, here’s what you want to consider during a life insurance review.
1. Have You Reached Any Life Milestones?
When you originally chose your policy amount, you most likely made your decision based off your mortgage amount, other debt, future college costs, and your family’s living expenses. If anything in your life changes in a way that affects those things, your life insurance coverage may need to change as well.Â
For example, if you added another child to your family, you might want to increase coverage. If you got a new mortgage or added any other debt, your liabilities increased and your policy should reflect that. Or maybe you’ve put your kids through college, have steadily growing savings, and have paid off the mortgage. Do you need as much coverage as you did when you had young children around and less money to spare? Any time you reach a new life milestone or experience a major change, review your coverage and update your beneficiaries.
2. How Long Have You Had Your Policy?
Just like technology, insurance policies can become outdated as well. Throughout the last few decades, life insurance has evolved into a more valuable and robust risk management tool. Today’s policies can cover more than just premature death. There are options to cover chronic illness and long-term care, and they can direct policy cash values among multiple options—not just the insurer’s general account.Â
If it’s been a few years or decades since you first purchased your policy, you may need to add additional coverage,such as long-term care, with a rider, which can be more cost-effective than buying a separate policy.
3. Is Your Policy Performing Well?
If you have a whole life policy with cash benefits, how do you know if your life insurance policy is performing as expected? When you purchased the policy, you were most likely provided a projection of values, but have you seen an updated estimate since then? How would it compare to what you were originally shown?Â
Your policy may be outperforming its original projection, but there’s also the risk that the policy has underperformed. If so, what might that mean for you and your plans for your loved ones?
Time To Review!
You already have enough to do without adding another task to the list. But you shouldn’t gamble with your family’s financial future. If you aren’t sure if your policy is right for you or if you’ve been through life changes that warrant a second look, I can help you examine your policies in depth so that you can have increased confidence that your plans are on track. Email me at [email protected] or call 704.960.9646 to get started!
About Antonio
Antonio Porretta is an independent wealth manager at Blackbridge Financial with 18 years of experience. He specializes in helping people create, distribute, and preserve their wealth. Antonio received an executive MBA from Saunders College of Business at Rochester Institute of Technology in 2007 and also holds the Accredited Asset Management Specialist (AAMS®) designation. Originally from Rochester, NY, Antonio has been a resident of Harrisburg, NC, since 2007. Outside of work, he enjoys playing soccer and tennis, coaching, and spending time with his wife, Laura, and their children, Cristiano, Victoria, and Matteo. To learn more about Antonio and how he can make a difference in your financial life, visit www.blackbridgefinancial.com.
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Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through Independent Advisor Alliance, a registered investment advisor. Independent Advisor Alliance and Blackbridge Financial are separate entities from LPL Financial.