Each New Year brings with it a renewed commitment to personal and financial health, and this includes the “health” of existing life insurance policies. In taking inventory of future needs, it is important to make sure the life insurance purchased years ago is still performing as expected and is sufficient to meet unexpected and expected needs. January is the perfect month to get a head start on reviewing existing policies and making any changes to keep them healthy.
Life insurance is often one of our most valuable assets; yet it is commonly one of our largest unmanaged and least understood assets. Taking a hands-off approach can exacerbate problems and result in policies failing to perform as originally illustrated. This could lead to having to pay more into the policy than originally planned, a reduction of the death benefit, or even result in an outright and unexpected lapse of coverage.
The C3 Financial Partners Trusted Advisor Policy Review Program provides attorneys, accountants, and other aligned professionals a comprehensive report, complete with recommendations to mitigate any policy health concerns. Our review considers changes in goals and personal circumstances, as well as changes stemming from the economy and within the life insurance industry.
Personal and Business Goals May Have Changed
The accumulation of wealth impacts a financial situation and future needs in several ways. Will an estate be subject to taxation? Will the policy be able to provide the liquidity to cover any transfer taxes and prevent a loss of wealth to heirs?
Business owners using life insurance and disability coverage to fund buy-sell agreements as a part of a continuity plan frequently face changes impacting these plans. A review of the buy-sell agreement coordinated with a policy review will provide critical feedback in ensuring the insurance benefits match the liabilities created by the agreement.
A C3 Financial Partners Trusted Advisor Policy Review will help deliver the answers and, if necessary, a plan for adjusting a policy to keep it on track.
Personal Circumstances Have Changed
An insured’s health is important and can have a significant impact on a policy’s performance. If someone has given up smoking or their health has improved, they may be able to reduce their premiums. If health has declined and a term policy is owned, there may be a way to convert to a permanent policy with no additional underwriting.
If future care and access to money is a concern, policy riders are available which offer a variety of living benefits, including low-cost long-term care and chronic illness choices.
Americans are living longer, and a policy should survive the insured. Policy guarantees and maturity riders can make sure a policy is designed to last and be in-force when needed.
A C3 Financial Partners Trusted Advisor Policy Review will provide any available options based on health, longevity, and any need for living benefits.
The Economy Has Changed
Taxes are rising and changes to personal, business, and estate taxes are to be expected. A life insurance policy is a non-correlated asset and can be positioned to mitigate risk from an investment portfolio and to off-set liquidity lost to taxation.
The future of the estate tax is uncertain and knowing how a policy should be owned and structured to address either an existing, or potential, estate tax is critical.
A C3 Financial Partners Trusted Advisor Policy Review will show if a policy’s benefits match the need for liquidity and demonstrate how a policy can be structured to be kept outside of the estate but not out of reach to the insured to be able to access its living benefits.
The Policy Has Changed
As a result of the protracted low interest rate environment and some insurers raising internal policy costs, many life insurance policies have not performed as originally illustrated. Conversely, a number of insurance companies have lowered policy expenses on newer policies, including basing insurance costs on a more favorable mortality table and offering more competitive underwriting.
A federal law enacted in late 2020 changed the definition of life insurance and allows most consumers purchasing new policies the ability to put more money into their life insurance policies for the same level of death benefit.
A C3 Financial Partners Trusted Advisor Policy Review will help determine if a policy is still the most suitable and if other options will offer more benefits and better pricing.
Our Outstanding Service Has Not Changed
Sadly, life insurance is often purchased for a specific purpose and left untouched. Make it a New Year’s resolution to stop wondering if existing policies are meeting current goals and objectives. Whether a policy is on track, needs adjusting, or if there are better policy options, our experienced team at C3 Financial Partners can help.
By leveraging proprietary, third-party life insurance policy and carrier review services, Veralytic and LifeTrends®, we provide our trusted advisor community leading edge tools to evaluate their clients’ policies. Policyholders should have clarity in understanding their life insurance and the confidence to know it is performing as expected. We look forward to our coordination with you to serve your clients in keeping their life insurance on track.
Veralytic is an independent life insurance research company that provides an objective and comprehensive evaluation of a life insurance policy’s suitability relative to comparable policies across the industry.
LifeTrends® is an independent research company that provides intelligence related to life insurance companies and life insurance products.
Securities offered through Lion Street Financial, LLC (LSF), member FINRA & SIPC. Investment Advisory Services offered through Lion Street Advisors, LLC. LSF is not affiliated with C3 Financial Partners.