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When Was the Last Time You Did a Life Insurance Review?

When Was the Last Time You Did a Life Insurance Review?

October 07, 2016

When considering your financial strategies and ongoing responsibilities, a life insurance review isn’t usually at the top of the list for most folks. Life insurance may not be the most exciting of topics, but it’s an important conversation to have with your advisor and a regular review is equally as essential.

If it’s been a few years since you’ve last reviewed your life insurance policy, it may be time to dust it off. Here are four reasons why you may benefit from a life insurance review.

1. You May Outlive Your Policy

Have you considered what would happen if you lived longer than your life insurance policy? Poor performance, loans, incorrect ownership, or beneficiary choices could lead to a mess when your policy is needed most.

There’s a chance your current policy may be pre-programmed with an expiration date on which you haven’t counted. For example, many policies are set to endow at age 95 or 100. But when people are living longer than ever, you could enjoy life long past that age. Just in the last 30 years, the U.S. centenarian population has grown 65.8%.

You could live much longer than you expect. If you outlive your policy, the repercussions may be disastrous. Make sure this condition is understood and planned for in advance. If you purchased your life insurance policy at a young age, it might be time to reconsider for how long you may potentially live.

2. You May Not Have Considered Taxes

Life insurance is often discussed as being income tax-free at your death. However, a surprising number of policies are inadvertently arranged to be taxable at death. If this was the case for you, would that be a problem? If you could quickly correct that problem now, would it be worth a review to find out?

If your policy was set up this way, your advisor can help you correct the problem and create a strategy to ensure your family isn’t caught off guard.

3. Your Policy May Not Be Performing As Well As It Could Be

How do you know if your life insurance policy is performing as expected? When you purchased the policy, you were most likely shown a projection of values, but since then, have you ever seen an updated estimate? How would it compare to what you were originally shown?

It’s certainly possible that the policy is outperforming its original projection, but given the direction of the economy over the past few years, it’s far more likely that the policy has underperformed. If so, what might that mean for you and your plans for your loved ones?

Now may be a good time to update your projections and ensure it’s on track. Most often, it’s easier to adjust a policy before it falls too far off track. Working with your advisor, you can evaluate how the policy has performed since you purchased and how it is projected to perform in the future.

4. Your Policy May Be Outdated

Life insurance has vastly changed over the past few decades, evolving into a much more valuable and robust risk management tool. Today’s policies can cover chronic illness, premature death, and long-term care and can direct policy cash values among multiple options — not just the insurer’s general account.

Depending on when you first purchased your policy, you may need to add additional coverage, such as long-term care, with a rider, which can be more cost-effective than a separate policy. Even if you don’t need to add features, you may still need to check if your beneficiaries are up-to-date and if you have the right amount and type of coverage.

Reviewing Your Policy

Working closely with my clients, I take the time to examine your policies in-depth so that you can feel more confident knowing your plans are on track and that you know what you’re paying for. If you are concerned about your life insurance policy or would like to schedule a review, contact me by calling 612-746-2261 or emailing

About Jon Marker, CLU®

Jon Marker is a financial representative with Foster Klima & Company and independent financial advisor. He combines his 24 years of experience in the financial services industry with his passion for helping to create individually tailored financial solutions for business owners, professionals, and their families. Through insurance, succession planning, legacy planning, and other financial services, Jon strives to provide specialized guidance for a lifetime of financial security. As a Chartered Life Underwriter® (CLU®), he has an in-depth knowledge of the insurance and risk management needs of individuals, business owners, and professionals. A lifelong Minneapolis, Minnesota resident, he specializes in serving successful and family-oriented business owners and professionals throughout the Twin Cities. To learn more, visit, call 612-746-2261, or connect with Jon on LinkedIn.