Have you reviewed your whole life insurance policy recently? You have to make sure your whole life insurance policy will stand the test of time. Unfortunately, like many things in life your insurance policy is dependent on its environment. In this case, low interest rates have provided insured clients with the difficult decision of whether their whole life insurance policy will be worth their investment. We find that the below pieces of advice help policyholders, like yourself, with determining how to evaluate their investment in a whole life insurance product:
- Testing your policy requires time, if your policy is on the older side, fifteen years or more, it could be well worth your time to review it with an advisor. It’s akin to having your roof inspected if it was properly built it should stand the test of time but that’s not always the case.
- If your policy was purchased in the 1980’s through the 1990’s, whole life insurance policies were not guaranteed although they were marketed as foolproof life insurance plans – trying to decipher your statement in the mail will not be the in-depth look at the future of your policy, meeting with an advisor will be.
- Paying your premium does not guarantee your death benefit – policyholders that have policies with loans might find themselves in situations where their beneficiaries might not receive the death benefit they thought they had.
- Interest rates have changed over the years. If your policy was issued in the 1990’s the interests rates were different than the 2010’s and they are different the today’s interest rate environment. Therefore, each policy is unique in its construction.
- Asking your accountant or attorney if your life insurance policy is “good” may not always be the best idea. Many whole life insurance contracts are intricate and require someone who is well versed in this subject.
- There are policies that give clients the ability to invest themselves and take control of the fate of their life insurance policies. This option could be a wise option for those who are dedicated enough to stay in touch with their financial advisor and monitor the contract properly.
- The cash value will grow with proper supervision and control, taking loans from your policy might backfire as it decreases cash value that the policyholder may have a difficult time supplementing – before taking out a loan on your policy, ask a financial expert for advice on how this will affect your policy in the long term.
There are many ways an experienced financial advisor would be able to guide you through the process of how your whole life insurance policy may be working for or against you. Your health, age, when you got the policy, among others are all determining factors regarding the long-term goals you have for your policy.
In a policy where the insured’s contract is only guaranteed until age 89, for example, and is in their early 70’s experiencing major health issues, the chances are the policy will be used as expected which would make it an overall good investment. A client who is in outstanding health in their 80’s with the same policy, however, may want to consider their options and evaluate which one would be the best for their individual needs. Age, health, and the current interest rates are some of the biggest factors one must access when choosing the course of your policies future. While the conditions of the stock market are out of your hands, there are options our experts could provide you with in order to best choose how your investment will best benefit your unique situation.