Life Insurance Series: What’s Your Life Insurance Plan?

Marlene Badai |

During my career, I have found that many people do not own a life insurance policy, or those who own a life insurance policy are unsure of what they have. This is why I have created the Life Insurance Basics Series, to empower readers with essential knowledge and invite you to consider your life insurance needs as a part of the overall planning process. As an independent advisor, I often find that the real question isn’t whether or not you are insured; it is whether you possess a life insurance policy versus having a real and genuine plan for your family’s life insurance needs. 

Starting with the end in mind

Of course, most of us approach planning for life insurance in a way that is psychologically different from other investments. After all, preparing for a long-term investment need that is met with stocks and bonds is more pleasant to think about than planning for our own mortality. Yet planning for what happens financially if (or when) we die is equally important to the people we leave behind as is planning for a long life of prosperity.

What are your goals for life insurance?

A meaningful conversation around life insurance planning starts with your goals. Addressing and understanding the question of “why life insurance” is a significant first step. For some, life insurance is as straightforward as replacing an income stream that suddenly disappears. In other cases, life insurance can act as a form of continuity planning, allowing an estate or family business to pass intact from one generation to the next. Oftentimes this goals conversation extends beyond simple insurance policies and takes on a more comprehensive planning characteristic, particularly for high net worth individuals or families with complex needs. Incorporating your current assets, income, liabilities (mortgages and business loans), and any future needs (such as college expenses) into the conversation allow for a more complete understanding of how insurance can help mitigate risk for family finances.

Evaluating the current insurance portfolio

With this goals conversation complete, we can better review your existing life insurance policy portfolio and, when necessary, recommend enhancements to address any gaps or deficiencies in coverage. For example, older (sometimes called legacy) policies were acquired at a different life stage and don’t accurately reflect current or future financial needs.

Executing and reviewing the plan

With this goals conversation complete, we can better review your existing life insurance policy portfolio and, when necessary, recommend enhancements to address any gaps or deficiencies in coverage. For example, older (sometimes called legacy) policies were acquired at a different life stage and don’t accurately reflect current or future financial needs.

Executing and reviewing the plan

With your goals clearly understood and your current portfolio thoroughly evaluated, we can discuss and implement a comprehensive life insurance plan. It is possible to save both time and money by working with an advisor who has already conducted thorough due diligence on the life insurance marketplace, allowing them to recommend efficient solutions from the most reputable and stable insurers available. As an independent advisor, I can do just that. 

Putting the plan to work isn’t the end of the life insurance journey. Like any good plan, a life insurance strategy will require professional monitoring and changes over time to account for shifts in personal circumstances. Life happens; marriages begin and end, children and grandchildren are born, and houses are bought and sold, all of which have implications for life insurance planning. In addition to changes in our personal lives, the life insurance products available are constantly evolving, meaning that ongoing due diligence is necessary to ensure the most appropriate solutions are used to meet your insurance needs.

This sounds complicated – can’t it wait?

Fortunately, getting started on life insurance planning doesn’t have to be complex or time-consuming. While planning for life insurance may sound unpleasant, it need not be alarming. The peace of mind that comes from working with a professional advisor and putting a plan in place can be quite liberating, and when combined with the benefits of protecting what matters most, there is every reason to start the conversation. For more life insurance fundamentals, stay tuned for the continuation of our Life Insurance Basics series.

 

 

 

Life insurance policies contain exclusions, limitations, reductions of benefits, and terms for keeping them in force. Your financial professional can provide you with costs and complete details.

All life insurance guarantees are based on the claims paying ability of the issuing company.

*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2022 Advisor Websites.