Four Tips On Reviewing Your Life Insurance Policy

Four Tips On Reviewing Your Life Insurance Policy

June 09, 2020

If we examine how most generational wealth is made in this country, the options are narrowed down into three areas: Real Estate, Stock Market, and Life Insurance. Out of the three, life insurance is perhaps the cheapest way to leave something behind for a loved one without worrying whether the value will be available when needed. If you own life insurance or if a policy is purchased on your behalf from your employer, here are four things you should be checking annually as a policyholder:

  • Make sure you can put your hands on your policy. Place the original policy in a secure fireproof place and store electronic copies on your computer or a cloud-based server. Losing a loved one can be stressful and depressing. Having essential documents like life insurance in one central location relieves some of the stress associated with planning a funeral.

  • If you have a group policy with your employer, locate the benefits statement, and record all relevant accounts. Attached to the benefits statement should include the HR benefits manager's contact information.

  • Consider if the coverage amount and the beneficiary designations are still appropriate for your needs. You may have purchased your policy before building a family. Now that you have children, the death benefit amount may not be sufficient. 

  • If you have a policy and the thought has crossed your mind to lapse it, make sure you are healthy enough to buy a new policy, should the need arise. This situation happened to a friend of mine. Her husband canceled her life insurance policy because he found a cheaper rate. He forgot how difficult it was to get the first policy on his wife. The new carrier would not underwrite her. She became uninsurable and was without a policy.

Be a responsible policyholder and set a date once a year to check all of your policies. Your beneficiaries will thank you. 

About Terrell Dinkins, MBA, ChFC®, CDFA®

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Terrell Dinkins, MBA, ChFC®, CDFA® is an investment adviser representative of and offers investment advisory services through OBN Wealth Advisors, LLC, a registered investment adviser offering advisory services in the State of Georgia and other jurisdictions where registered or exempted. Main Office: 950 Eagles Landing Pkwy, Suite 216, Stockbridge, GA 30281. Tel: 404-723-9780. Website: OBN Wealth Advisors. Image by Gerd Altmann from Pixabay