One of the most overlooked and under-reviewed aspects of someone's financial plan is too often their life insurance coverage. This is a critical mistake which can have a massive impact on those left behind. The goal of this blog is simple, give you enough reasons to spend some time reviewing your life insurance coverage to make sure the dreams you and your family have do not disappear if you were to pass away. Getting the life insurance part of your financial house in order is one of the most selfless and important chores you can do.
So with that said, let's look at what you should review.
1. Make sure you have the right amount of coverage. There are any number of ways to determine the appropriate amount of life insurance. Some advisers will advise you to multiply your income by a certain number or you could add up your financial obligations. The final option would be to work backwords; if your beneficiary was left a certain amount of capital, how much would it spit off in income.
2. Understand what type of coverage you own. There are so many types of life insurance, it can be difficult to keep them straight. Term, permanent, universal, variable and the list goes on and on. My advice would be to sit down with a financial adviser and have them review what type of policy you own.
3. Check your rates to see if they are competitive. Over the past few years, several life insurance companies have lowered their rates. If you are in good health, you might benefit from getting rates on a new policy to confirm you are getting the most coverage for your dollar.
4. Do riders matter? An often overlooked aspect of a life insurance policy is the option of a rider. When reviewing your policy, look to see what riders you have on your policy and what are you paying for them? One reason to consider replacing your current term insurance policy with a new one is the option of an accelerated death benefit. This benefit can help you prepare financially in the case of a serious illness.
In summary, I encourage everyone reading this to schedule an appointment to review your life insurance program. There is no charge to meet with me to review your policy or to check prices on new coverage. Hope to hear from you soon.