What You Need to Know
- COVID-19 has given everyone a lesson about the importance of protection.
- Too many of your clients may still be making ex-spouses of their primary beneficiaries.
- Plenty of other life changes could change coverage needs.
The unfortunate effects of the pandemic have led many people to increase ponder their mortality — reflected by LIMRA research indicating that 31% of Americans are now more likely to buy life insurance.
Whether your clients decided to purchase a policy within the past couple of years or did so before COVID-19 emerged, September is Life Insurance Awareness Month and offers a great opportunity to reevaluate and potentially update these documents.
I believe there are four key considerations for financial advisors when life insurance policy checkups on behalf of their clients:
1. Identify any life changes.
Significant life changes since the purchase of a policy can dramatically impact your client’s insurance needs.
- Become a parent?
- Had additional children?
- Taken on a new mortgage?
- Changed their jobs?
- Gotten married or divorced?
- Experienced a change in health status?
- Become a provider/caregiver for a parent or other family member?
Changes such as these should all be evaluated to determine whether the current policy is still a good fit.
Alerting a client to this situation is often greatly appreciated, not only by the client but possibly by their current spouse too.
2. Evaluate the current policy,
Even when a policy has been purchased relatively recently, many policyholders don’t have a clear idea of what it entails, so I recommend taking a closer look at these details.
In addition to the beneficiary information, advisors should check whether