Have You Reviewed Your Life Insurance Lately?

Puzzling question about life insuranceWhen is the last time you thought about your life Insurance policy? Likely, not since you first purchased it. Nevertheless, there are decisions that must be made before purchasing or maintaining these policies.  With an assortment of products bearing confusing names like whole life, term life, universal life, variable life and second-to die-life insurance, the public is often frustrated into inaction.

NASDAQ's recent article, "Why Have Life Insurance?," says it's no wonder so many Americans don't have life insurance. It cites a recent study by life insurance advocacy group LIMRA which revealed that most Americans thought a 20-year $250,000 level term life policy for a healthy 30-year-old would cost at least $400 a year. However, annual premiums for this type of policy generally are closer to $150. LIMRA also noted that 83% of consumers don't buy life insurance, and inaccurate information like this could be part of that decision. In addition, there are people who are paying for insurance that isn't a good fit for them, paying too much for their insurance, or just have too little coverage to protect their family.

That's why it's important for you to sit down annually with an insurance professional to review your policy and also to speak with your estate planning attorney about the role life insurance may play in your overall estate planning strategy. Reviewing your life insurance policies is one way to make sure you have the coverage that is right for you and your family as you age and your family situation changes. For example, some of these policies build up cash value with each premium paid, some invest that cash value in the stock market, while others pay a fixed rate of interest. Some have zero cash value; and a few combine all these ideas.

Finding the right policy may be easier than you think. There are really just two basic types of life insurance: term and cash value. Cash value, or "permanent," life insurance policies offer death benefits and some investment qualities, as some of the money you spend on the policy goes into a savings program. Cash value policies have higher premiums than term policies because term life offers only death benefits during the policy term. Term can be a good option for young adults because it's pretty inexpensive.  Term life has its drawbacks. If you outlive the term of the policy, you or your family get nothing back. Term life policies can be renewed however and some can be converted to permanent coverage.

The big question is how long do you plan to keep the policy? If you'd rather not have to pay premiums for decades, term life may be more attractive, especially if you're just looking for a short-term hedge against the unforeseen. If you are looking at estate planning, permanent life insurance may be a better choice.

Talk with your estate planning attorney before you start spending money on a policy. He or she can help you compare term vs. permanent insurance options to help you create a strategy to make sure that your coverage adjusts over time as your family needs change. 

You can learn more about this topic as well as other strategies on our website under the tab entitled: charitable planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.  However, proper estate planning is not a do-it-yourself project.  Why not call us for a complimentary consultation at 757-259-0707.

Reference: NASDAQ (October 9, 2015) "Why Have Life Insurance?"


Like this article?

Share on facebook
Share on Facebook
Share on twitter
Share on Twitter
Share on linkedin
Share on Linkdin
Share on pinterest
Share on Pinterest

Leave a comment


We have a LOT more where that came from!

We hate spam too. We will never share or sell your information.

Call Now ButtonCall Us Now https://jsfiddle.net/7h5246b8/

Request a free consultation

We hate spam too. We will never share or sell your information.

We've been putting together as many resources as possible so that we can continue to help:

  • If you’re a current client with a signing appointment or a prospective client with a consultation and would prefer that meeting take place in your own home, we can accomplish that with a little bit of pre-planning on our part and with the addition of a laptop, smartphone, tablet or other computer in your home to facilitate this virtual meeting. For those of you that need to sign legal documents, that too can be accomplished with the use of a webcam (FaceTime etc.), so that we can witness and electronically notarize all of your important legal documents.
  • We launched the rollout of our on-demand webinar early so that new clients and our allied professionals can view the important component parts of ‘an estate plan that works’ at their convenience.  That is available on our website.
  • Live video workshops will be produced as quickly as possible and certainly ahead of our previous schedule; we will keep you posted as these events become available. Given the ‘boutique’ nature of the firm, we rarely have more than ten people in our office including team members at any one time. During this period of ‘social distancing,’ we promise to have no more than 8 people at any time.   This allows us to comply with the Governor’s directive to limit in-person gatherings.
  • The best way to communicate with us is still by phone during regular office hours of 8:30 to 5:00, Monday through Friday, or, you can email any of our team members (that is, their first name followed by @zarembalaw.com).  We will respond to these emails as quickly as possible.
  • Please continue to follow the directives of our local, state, and federal agencies. For your health and in consideration of our team who is assisting you, if you’ve scheduled an office appointment or planned to drop off paperwork and are experiencing a fever, dry cough, or shortness of breath, please contact your primary care doctor for guidance and then our office to reschedule.

Thank you, Walt and the Zaremba Team

Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.