Not A “One-And-Done”…

Welcome to 2024! With 2023 now in the rearview mirror, January is the appropriate time to take stock of the previous year, as well as plan ahead for the year upcoming.

One of the critical (but often forgotten) topics of review is your life insurance policy. For most, after the initial purchase of this necessary instrument, it is immediately placed in the file cabinet to hopefully never be used. Once out of sight, it is usually forgotten, the owner satisfied that his or her family is now covered in the event the unimaginable should happen. This however, can be a major mistake. Not many of us have the same circumstances (family, financial, health) that we had as recently as ten years ago. With those changing circumstances, current coverage may or may not be enough, or even needed. So, let’s start with the beginning and go from there.

Life insurance is a critical financial tool that provides protection and peace of mind for you and your loved ones. However, simply purchasing a life insurance policy is not a one-and-done task. Life is dynamic, and your circumstances, financial situation, and family structure evolve over time. This makes it imperative to regularly review and update your life insurance policy to ensure it aligns with your current needs and goals.

1. Life Changes, Insurance Should Too: Life is a journey filled with various milestones, challenges, and changes. From getting married and having children to purchasing a home or starting a business, each significant life event brings with it new responsibilities and financial considerations. When such changes occur, it’s crucial to assess whether your existing life insurance coverage is adequate to protect your loved ones in the event of unforeseen circumstances.
2. Protecting Your Growing Family: One of the most common reasons to update a life insurance policy is the expansion of your family. If you’ve recently welcomed a new member through birth or adoption, your financial responsibilities have likely increased. A policy that once provided sufficient coverage for a smaller family may now fall short. Updating your life insurance ensures that your family’s financial future remains secure, covering education expenses, mortgage payments, and other essential needs.
3. Adjusting Coverage for Changing Needs: Life insurance isn’t a one-size-fits-all solution. Your coverage needs at the start of your career may differ significantly from those in your mid-career or during retirement. Periodic assessments of your financial situation and goals will help you determine whether your current coverage aligns with your needs. Whether you need to increase or decrease your coverage, adjusting your policy ensures that you’re neither overinsured nor underinsured.
4. Income Changes and Lifestyle Adjustments: Changes in your income and lifestyle can impact your life insurance requirements. If you’ve experienced a significant increase in income or accumulated assets, you might need additional coverage to protect your family’s standard of living in the long term. On the other hand, if you’ve paid off debts or downsized your lifestyle, it may be an opportune time to reevaluate your coverage and potentially save on premiums.
5. Reviewing Beneficiary Designations: Life insurance isn’t just about the policyholder; it’s about providing financial support to beneficiaries. Over time, relationships may change due to marriages, divorces, or the birth of new family members. Regularly review and update your beneficiary designations to ensure that the intended individuals are the ones who will receive the benefits. Failure to update this information could lead to unintended consequences and legal complications.
6. Health Changes and Underwriting: Your health condition at the time of purchasing the policy plays a significant role in determining premiums. However, as life progresses, health conditions may change. If you’ve made positive lifestyle changes or overcome health challenges, it might be worth exploring the possibility of securing a more favorable premium rate through policy updates. Conversely, delaying necessary updates could result in higher premiums if new health issues arise.
7. Taking Advantage of Policy Riders: Life insurance policies often come with optional riders that can enhance coverage based on your specific needs. Examples include critical illness riders, disability income riders, or long-term care riders. Periodically reviewing these riders and considering whether they align with your current circumstances can add valuable layers of protection to your policy.
8. Evaluating Investment Performance: Certain life insurance policies, such as universal life or variable life insurance, have an investment component. Changes in the financial markets can impact the performance of these investments. Regularly evaluate the performance of your policy’s investments and adjust your strategy if needed. This ensures that your policy continues to meet your financial goals and provides the intended benefits.
9. Staying Informed About Policy Changes: Insurance providers may update their policies or introduce new features over time. Staying informed about these changes is crucial to understanding how they may impact your existing coverage.
10. Estate Planning Considerations: Life insurance is an integral part of estate planning. If you’ve recently established a trust, updated your will, or engaged in other estate planning activities, it’s essential to ensure that your life insurance aligns with your broader estate planning goals. This may involve adjusting coverage levels, changing ownership structures, or coordinating beneficiaries with other aspects of your estate plan.

In conclusion, your life insurance policy is not a set-it-and-forget-it financial product. Regularly updating your policy is a proactive and responsible approach to ensure that it continues to serve its intended purpose – protecting your loved ones in times of need. Life is dynamic, and your insurance coverage should evolve with it. By staying vigilant and assessing your changing needs, you can rest assured that your life insurance remains a solid foundation for your family’s financial security.

Don’t let another day go by without having your policy reviewed for the coming year. I’m currently offering a complimentary review to make sure you and your family’s needs are being addressed appropriately. And if you’re currently not covered, all the more reason to reach out. You can reach me at 941-704-3134 or email me at d.babecki@db3insuranceservices.com to schedule your review. And remember, a life insurance policy is not a “One-And-Done”!

 Let’s Make Sure You and Your Family’s Needs Are Covered In 2024!

Thanks again for reading!

Sincerely,

David J Babecki

The above article reflects the opinions and thoughts of David J. Babecki. The information contained in this material is believed to be reliable, but not guaranteed. It is for informational purposes only and is not a solicitation to buy or sell any products which may be mentioned. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

Please note: All guarantees and/or promises are based on the claims-paying ability of the respective insurance company.