Why is a Life Insurance Policy Review Important?

The Impact of Life Changes and How Optifino Can Help

As your life evolves and your insurance needs to change too. Regularly reviewing your life insurance coverage is a crucial aspect of your annual financial assessment. It not only ensures that your coverage aligns with your current circumstances, but also serves as the foundation for updating your broader wealth and estate plans. While your policy may have suited your needs at one point, you’ll likely discover disparities in your coverage today. These disparities can arise for various reasons.

Life Happened

In just one year, significant changes can occur that impact your life insurance needs. Events like a change in marital status, the addition of children or grandchildren, a new job or business venture, or even accumulating more wealth can drastically alter your financial situation and future aspirations.

Each of these life events can trigger substantial shifts in your coverage requirements and premium costs. If any major life event has altered your circumstances, it’s highly likely that your life insurance needs have changed as well.

Is the death benefit of your policy sufficient to provide for your family’s financial well-being? Should your policy serve as a potential source of income for future needs like supplementing retirement, covering tuition expenses, or acquiring a second home? Are you considering the potential estate taxes your heirs might face, and is your policy equipped to handle this liability while safeguarding your legacy? Have you experienced a growth in your family, and are your beneficiary designations up to date?

Optifino’s life insurance policy review can provide you with answers and a tailored plan to adjust your policy in line with your evolving goals.

The Economy is a Roller Coaster

Due to recent record federal spending, it’s highly likely that taxes will increase, and adjustments to personal, business, and estate tax rates should be anticipated. Your life insurance policy could be one of your most substantial assets, offering a relatively stable return when compared to other types of investments. Therefore, it’s crucial to position it strategically within your overall investment portfolio to mitigate risk and counterbalance any liquidity challenges posed by taxation.

The future landscape of estate tax levels remains uncertain. Understanding how your policy should be owned and structured to address existing or potential estate taxes is of paramount importance. If your policy is currently owned in a way that includes its value within your estate, it’s essential to explore your options to minimize undue income and estate taxes while optimizing wealth transfer.

An Optifino life insurance policy review ensures that your policy’s ownership and benefits align with your liquidity needs. It also illustrates how your policy can be structured to reside outside of your estate, while remaining accessible to provide living benefits, including tax-advantaged access to its cash value.

Those New Year Resolutions Stuck…or Didn’t

Did you know that Optifino has the capability to request your life insurance company to re-evaluate your policy? If you’ve quit smoking or experienced improvements in your health since your policy’s issuance, you may be eligible for lower premiums by providing medical evidence. Demonstrating your proactive approach to managing health risks can result in substantial annual savings on your policy costs.

On the other hand, if your health has declined, and you currently hold term life insurance, it’s prudent to investigate whether your policy offers an option for conversion to permanent coverage. In many cases, this conversion can be completed with minimal or even no need for additional medical evidence.

Consider that your present health is not the sole factor to consider. Many modern life insurance policies come with riders that provide various living benefits, including affordable long-term care and chronic illness options. In certain scenarios, if you don’t require access to your policy’s living benefits, you may be eligible for a refund of some of the premiums you’ve paid.

Your policy should outlast you. Evaluating your policy for guarantees and maturity riders ensures that it’s designed to endure for your entire lifetime.

An Optifino life insurance policy review presents you with choices based on your health, your requirements for living benefits, and your long-term considerations

Your Policy Has Changed

While interest rates have surged recently, the life insurance industry has been affected negatively by two decades of declining rates. This decline has meant that many life insurance policies haven’t performed as initially illustrated, potentially impacting the planned performance of your policy. A review of updated policy illustrations can shed light on any effects on your policy.

The good news is that there have been positive developments as well. Insurance companies have reduced policy expenses on newer policies, partly by basing insurance costs on more favorable mortality tables and providing more competitive underwriting. Additionally, recent federal legislation has altered the definition of life insurance. Those purchasing new policies now have the option to allocate more funds to their life insurance policies for the same level of death benefit cost.

An Optifino life insurance policy review serves to determine if your current policy is still the best fit for you and if any adjustments are necessary to keep it aligned with your goals. This review will also identify whether alternative policy options can provide enhanced benefits and more competitive pricing.

Now, let’s delve into an illustrative scenario showcasing how Optifino’s expertise and solutions can effectively assist clients like Nathaniel in navigating these evolving dynamics

Introducing Nathaniel

Nathaniel is 55 years old and married with two children. He purchased life insurance 15 years ago for wealth accumulation and income protection benefits. After working with the Optifino team, he realized his life insurance policy no longer aligns with his new goals. He now wants to ensure his loved ones are taken care of by repositioning his policy to address his estate planning needs.

We ran his current policy through the Optifino platform, and our team of experts provided several tax-free exchange options. Now, let’s visualize the comparison and benefits with the graph below:

  • Increase his Death Benefit by 280%, while keeping his current and future premiums the same.
  • Keep his existing Death Benefit the same while reducing his premiums by ~40%.
  • Day 2 death benefit with the potential for upside over the guaranteed value.

Our Extraordinary Client Service is Here for You

Life insurance isn’t a one-time decision; it should evolve with your life changes. Take control of your future by getting your life insurance policy reviewed. At Optifino, we’re here to help our clients secure their assets, pursue their goals, protect their businesses, and leave a meaningful legacy.

We’re leaders in private insurance advisory and risk management, combining expertise with a sincere dedication to our clients’ needs. This enables us to create practical solutions that work best for you.

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