Reviewing Your Life Insurance Plans

If you already have life insurance coverage you should be very proud of for making a promise to care for your loved ones no matter what. Don’t be too relaxed though. Your insurance needs change as your financial life does. Here are a few adjustments you can consider after evaluating your need for life insurance.

Change your beneficiary

After a major life change, such as remarriage or divorce, it is best to go over your list of beneficiaries. You can always change your life beneficiary by just filling out a short form. Your life insurance company will provide you instructions.

Be careful not to make common mistakes such as naming a minor or your estate as beneficiary. Choose a trusted adult instead. The insurance payout cannot be given to a minor unless he has a guardian appointed. And the policy proceeds have to go through the legal probate process if you name it to your estate.

Monetize a permanent life policy

You can cash out your permanent life insurance if you don’t need the policy. But that would also mean your chosen beneficiary won’t get anything after you pass away.
Consider monetizing if:

• The cash value of the policy has built up.
• If you have a term life insurance policy instead of a permanent one.
• When you don’t owe the insurance company a surrender fee anymore when cashing out. You are charged surrender fees if you trade out the policy in its prior years.
• You don’t need a life insurance coverage.

Sell your life insurance policy

Before you sell your life insurance policy, talk to your financial advisor. In a life settlement, your policy is bought at a price that’s less than the death benefit but more than the cash value. It’s better to make sure you’re getting a good deal.  The buyer will then make premium payments and will be the beneficiary when you die.

Purchase more coverage

You can buy another policy that adds to your existing coverage. You can also add more coverage without buying a new one if your policy covers a guaranteed insurability rider. But this will let you add coverage at specific conditions only. The additional price will be based on your health when you bought the policy, your current age and the amount of coverage.

Switch from term life to permanent life

Term life policies are usually convertible to a permanent policy such as whole life or universal life. The options for your permanent life policy will depend on your life insurance company.

Make sure to check for the deadline of conversion. It may occur before the policy expires.

Planning Ahead

Reevaluating your coverage should be done periodically.  Our needs and circumstances change as life goes on. At Insurance Services of the West, our agents aim to provide comprehensive insurance policies that make your life easier. You can get more information about our products and services by calling our agency at (425) 681-0996. Get your free quote today