6 Questions to Ask About Your Life Insurance Policy

Insurance News

6 Questions to Ask About Your Life Insurance Policy

Posted by Steinhandler Wealth Advisors
5 years ago | September 12, 2017

Did you know that September is Life Insurance Awareness Month?   If you already have a life insurance policy, you probably think you’re “done” with that, right?

Whether you have a policy through your employer, or you purchased one on your own years ago, unfortunately you aren’t “done” thinking about life insurance. Unless you’re familiar with your policy and feel absolutely certain it is the best fit for your needs, your loved ones might not be nearly as protected as you believe.

Luckily, it’s not that difficult to familiarize yourself with your life insurance plan and assess it. Ask these questions to get started, and give us a call if you need more help.

What type of life insurance do I have? A term life insurance policy covers you for a specific period of time, and then the coverage stops. A permanent life insurance policy is, as the name implies, permanent. You need to know which type of policy you have, so that you don’t end up with a risky gap in coverage.

Does my plan offer conversion options? Many younger people enroll in term life insurance plans, because they tend to offer much lower premiums. But then, when the term has ended, they are shocked at the higher premiums of a permanent life insurance plan. If your policy offers conversion options, you can transition from a term policy into a permanent one, with perhaps a little less sticker shock.

Who is my beneficiary? Do you know who you selected as your beneficiary, when you first enrolled in your life insurance policy? Is that person still the right choice? Did you select a back-up beneficiary, just in case something happens to your primary beneficiary at some point? It’s a good idea to reevaluate this choice every few years.

How much are my premiums? For some plans, such as universal life insurance plans, premiums can vary. Make sure you know what’s going on with your policy.

What is the contestable period? Sometimes, life insurance companies contest payouts of life insurance benefits. This is usually nothing to worry about, as long as you didn’t omit or alter any information on your initial application. But, it’s something to know about your policy. In most cases this period lasts for two years after your death.

How much is my policy worth? This might be the most important question of all. How much is your policy worth, and is that amount really enough to provide for your loved ones? Call us to schedule an appointment, and we can perform a needs analysis. Armed with that information, you can decide whether your policy needs to be updated to one that better protects your family.

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