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Family Insurance

Many people believe their life insurance needs are met as soon as they buy their insurance. The reality is that buying life insurance is only a first step. Once life insurance is purchased, people tend to tuck their policies away and forget about them. But, your life insurance should be reviewed from time to time. Here are key questions to determine if your life insurance still meets your needs.

What are your goals?

You probably bought your life insurance for a specific purpose. Maybe you wanted the insurance so your family would have a financial cushion if they had to live without your earnings. Or you might have wanted insurance to pay final medical and funeral expenses, pay off a mortgage or cover estate taxes. Evaluate whether your original reasons for buying insurance are valid now and whether your existing coverage is sufficient to accomplish the objectives you currently have.

Are your beneficiary designations up to date?

Over the years, family changes such as births, deaths, marriages and divorces can cause beneficiary designations to become outdated. Contact your insurance company if you need to change a beneficiary designation.

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Is the insurer financially sound?

You can find out by checking the company's financial reports and its credit ratings from the major rating agencies. If the company that issued your policy appears to be experiencing financial difficulties, you'll want to consider switching insurers.

Might you qualify for lower premiums?

If your health has improved or you've quit smoking since your policy was issued, you may qualify for an upgraded health rating and lower premiums.

Would a trust be helpful?

The proceeds of your life insurance policies will be included in your gross estate for federal estate-tax purposes. If your estate would be subject to estate tax, establishing an irrevocable life insurance trust to hold your policies might be an option worth considering, depending on your individual tax situation.

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