Life Insurance Policy Checklist

Whether you’re contemplating getting life insurance for the first time or planning to reassess your existing coverage, here are some tips to prepare for a consultation with a financial expert who can assist you.

Schedule Appointment »

Consider your current life stage – it’s vital for everyone, but particularly for those transitioning into a new phase of life. Such transitions can include:

• The birth or adoption of a child.
• Changes in marital status, such as getting married, divorced, or losing a spouse.
• Initiating a new business venture or experiencing leadership shifts in an existing business.
• Purchasing a property.
• Your children becoming independent and moving out.
• Alterations in your employment, like starting a new job or receiving a promotion.
• Undergoing major changes in your financial status, including asset fluctuations or receiving an inheritance.

Checklist for Reviewing Your Life Insurance Policy

If you’re currently covered by life insurance and are undergoing any of these life transitions or gearing up for a new phase in your life, it’s advisable to go through the following checklist for reviewing your life insurance policy before your appointment with a financial advisor.

Coverage Considerations

For income protection, evaluate whether the death benefit from your existing policy suffices to sustain your family’s lifestyle or to support the ongoing success of your business. In terms of estate protection, consider if your death benefit can adequately handle estate taxes or needs related to wealth transfer. An LIMRA report stated that approximately 44% of American families would face substantial financial challenges within six months if the family’s main income earner were to pass away.

Pricing Factors

The underwriting process assesses the risk associated with providing coverage to an individual. Being younger and in good health typically results in lower premium costs. Reflect on these questions: What is your current expense for life insurance coverage? Could you obtain the necessary protection at a more affordable rate? Considering your current health and age, would undergoing underwriting now potentially lead to better premium rates?

Policy Ownership and Beneficiaries

Consider whether the ownership of your policy aligns optimally with your estate planning or business objectives. Are the beneficiaries listed in your policy current? Have you adequately addressed all your plans regarding succession, your employees, or heirs? If you have doubts or considerations about these aspects, it’s beneficial to prepare a list of potential modifications to discuss during your meeting.

Policy Type Evaluation

Reflect on whether the kind of life insurance policy you hold, be it term, whole life, or universal life, continues to fulfill your goals. Consider any employer-provided group life insurance or other policies you have. If you possess term insurance, what are your plans after the term concludes? Determine if your policy can be converted to permanent insurance and the timeframe for such a conversion.

Additional Coverage Features

Assess whether the optional riders and additional coverage you have are still necessary. Are there any new features that might be beneficial? Riders are designed to tailor your insurance policy to your specific requirements. For instance, you might think about including a Children’s Insurance Rider, allowing your child to convert their term insurance to permanent insurance upon reaching 25 years of age.

Assessment of Cash Value and Policy Performance

Consider if the performance of your permanent life insurance policy is aligning with your expectations. Evaluate whether your policy has sufficient cash value to support its continuation for as long as necessary or to fulfill your other financial objectives.

Importance of a Life Insurance Policy Review

Reviewing your life insurance policy can either confirm that your coverage aligns with your objectives or reveal that you have excessive or inadequate coverage. Such a review may uncover opportunities for more cost-efficient coverage or expose mismatches between your existing coverage and your current goals. A financial expert, with their expertise and knowledge, plays a crucial role in guiding you through this essential process.

Policy reviews are also instrumental in integrating the cash value of your life insurance into your overall financial portfolio. They help in setting new legacy goals and assessing how your business interests intertwine with your personal insurance needs.

This process is key to safeguarding your loved ones. Ensuring they are well-provided for and not burdened financially in your absence is a fundamental aspect of life insurance planning.

Let McFie Insurance Help You

Choosing insurance doesn’t need to be as complicated as insurance agents make it seem. Give McFie insurance a call or schedule a consultation and we can help you decide what type of insurance is right for you. Or check out our Life Insurance checklist!

by Gracine McFie

There are many ways to access information about finances, but it can be hard to determine which sources are trustworthy. I like to put information together in an accurate, straightforward, easy to understand manner so people can make good financial decisions based on the information provided without having to waste time wondering if the source is reliable.