Life Insurance Is An Important Asset Which Should Be Managed!
Based on a study by the National Association of Insurance Commissioners, over 60% of people who own life insurance are not sure what the policy provides, and 29% admitted that they needed more insurance! Today’s life insurance policies are complex financial instruments and should be monitored like any other asset in your portfolio.
Are you confused by the choices? Term, Whole life, Universal life? Not sure what Convertibility or what Cash Value Guarantees mean? It is important to understand your financial goals, be educated about your options, and realize that life insurance is not a buy-and-hold proposition but should be reevaluated as your circumstances change.
We suggest a Policy Audit & Review or PAR, which not only evaluates your policy statement but considers factors such as product suitability for your unique circumstances, and performance as related to your individual goals. Our experts can tell you if your policy carries enough protection, if your insurance provider is sound, and what corrective action may be possible before a crisis presents you with an unpleasant surprise. Did you know that if your policy is not “guaranteed renewable,” declining health could render you uninsurable? Are you aware that if your policies have the wrong ownership and incorrect beneficiary language, that may cause unintended income tax problems and have disastrous consequences for you and your family.
A PAR considers these financial factors:
- Does your policy still meet your financial needs?
- Are the original beneficiary designations still appropriate?
- Is the policy ownership structure still applicable?
- Can you reduce your premium?
- Can you get more coverage for the same premium?
- Has your health improved, creating the opportunity to reduce premiums?
- Are policy charges competitive?
- Is the insurance provider financially stable?
A policy’s long-term guarantees and projected performance are only as good as the financial strength of the insurer. A PAR evaluates an insurer’s financial health as determined by various rating agencies and provides a review of the company’s financial strength as compared to statutory requirements and other insurers. Approximately 40% of non-guaranteed universal life policies, and approximately 35% of variable universal life policies, lapse during the insured’s lifetime or within five years of life expectancy. A PAR exposes premature lapses in policies, especially those that were intended to last a lifetime – YOURS!
If you have not done so recently, we strongly recommend that you review your existing life insurance policies. TFG offers offer a FREE PAR audit and review of your policies. We also handle audit and review of your business’ commercial policies. Find out more here or contact Cory Lyon, TFG Financial Advisor, at 561-209-1120 or email CLyon@TFGFA.com.
