Insurance Talk: Why a Periodic Review Can Lower Your Costs

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Here, Asset MarketPlace, ABA’s newest affinity partner, explains why a periodic insurance review can lower your insurance costs.

Unlike investment portfolios, which are reviewed on a regular basis with a well-informed and trusted advisor, insurance is not commonly reviewed with any frequency, much less with an insurance professional. This is a big mistake.

Here are four good reasons why your insurance policies should be reviewed every couple of years.

Reason Number 1: Cost Savings

Since policies are infrequently assessed, it is not universally known that the cost of insurance has significantly declined in recent years. While insurance carriers may not be advertising this fact, the cost of basic term life insurance has decreased by nearly 50% over the past decade. This means replacement policies for some individuals are a smart idea. Other premium costs have gone down as well and for those who need more coverage because of changed circumstances, it is now possible to get better coverage with better benefits at the same cost of older policies. For ABA members and their families, discounted policies may be available creating even more savings.

Reason Number 2: Manage Risk

The fact is life is full of risks (for example, chronic illness, serious injury, outliving assets, early death, and so and so on). Most of us put these disturbing thoughts out of our minds because they are unnerving, to say the least. Being both a consumer and an insurance advisor, I can assure you that it is much less stressful when these risks are brought out into the light of day, assessed, and then dealt with at an appropriate comfort level. This is especially true since there are many cost-effective solutions now available to minimize your exposure if you are so inclined.

Reason Number 3: Market Place Changes

The impact of market fluctuations on insurance products should not be underestimated. The impact cuts both ways: to consumer’s advantage and disadvantage. To your advantage in terms of lower costs and true innovations, including inflation-proof clauses, streamlined options, enhanced features, and combined benefits, to name a few. But market changes have also had a negative impact, especially because of lower inflation rates. There are many owners of policies written 15, 20, or more, years ago that are in jeopardy of being underfunded. Unknown to some of these policyholders, their coverage could actually expire leaving them with no benefits when they are needed most. If you have a universal or whole life policy written several years ago, and have not checked into the current values, you need to have it evaluated.

Reason Number 4: Keep Up-to-Date With Named Beneficiaries

I once saw a speaker on public television who talked about updating the beneficiaries named on policies as the very first thing to do to ensure financial security and it is often the most neglected. Typically, the actual policy paperwork is filed somewhere “safe,” which means that it ends up buried in a safety deposit box or the back of a file cabinet. It is astounding to note, but true, how little effort it takes to update the beneficiaries and how frequently this information is not current. Owners are often shocked to see that the beneficiary of their policy is a former spouse or a deceased family member, or they realize there is a glaring omission. Of course, the real shock occurs after the fact when it is too late to correct. A simple preventative step could avoid mayhem, emotional drama, and unintended economic hardship. Checking the named beneficiaries on all your policies to make sure it is aligned with your wishes is usually the first step of an insurance review.

ABA members are eligible for a complimentary insurance review from Asset MarketPlace.  Individual and/or company-wide benefit packages are available, including expanded income replacement (DI) and life insurance options. For additional information, call (888) 694-8585 or visit