Life insurance is rarely, if ever, objectively reviewed after the initial purchase. This can result in the policy being severely underfunded, incorrectly listing beneficiary designations, and overall underperformance for the client. In this episode of Money Script Monday, Adam offers a process to verify your life insurance policy is performing to its highest potential and providing the necessary coverage for your family.

Click on the whiteboard image above to open a high-resolution version of it!

Video transcription

Hello, everybody, and welcome. I want to say thank you for clicking through to this video.

Our title today is "Do you have the old insurance or the new insurance?"

The purpose of this video today is to really decide if what you bought, your life insurance policy, is really what you want. Is that really what you need?

What we're going to do today that will really help you determine that is do an analysis of what your current policy could do and look at some of the reasons why you want to take a look.

We're going to talk about some of the motives behind buying life insurance in the first place.

And then what we'll do is an assessment of what's in the marketplace now.

Because we have a lot of different ways to do this and if you're more of a numbers person and you want to see a true analysis, what you can do is work with your insurance agent, and there's actually a form down below that you can download.

What that form will do is allow us to look at your current policy and look at the numbers, because really, at the end of the day, none of this matters if your current policy is doing really well and it projects out the way that you expect it, too.

When we run that report, there's three things that can happen:

• We can show you that you can get the same benefits, so the same amount of insurance, whatever benefits in there but actually pay less.
• You can get more benefits and pay the same amount that you're paying now because there might be some new types of insurance out there.
• We’re going to show you that the policy that you have now is actually right on track.

You just need to keep paying premiums and make sure that you meet with your insurance agent every year to make sure none of these life changes happened that might warrant a new policy or more coverage.

Analysis

So, let me ask you a question. When did you purchase your policy? Was it 3 years ago, 15 years ago, 5 years ago?

And since then, I want to also ask you a question, have you met with your advisor every 6 to 12 months? Are you doing that annual review, bringing your statement in and reviewing that policy?

Since you took out your policy, have you taken on any debt, got a new job, married, had kids, bought a home?

All those things may warrant more insurance.

Have you scoured the marketplace? Have you looked at what's out there? Are there new or better products that could be suitable for you?

Have you made your payment on time every year? Have you taken money out of your policy?

And then finally, the longevity of that policy, is that going to be there when you need it the most?

Usually, we want that policy to be there out to age 100 or so because we know people are living longer and longer.

These are just some of the questions that you want to ask yourself if you have a current policy.

Motive

Okay. So then, let's talk about some of the motives behind why you may have purchased that policy.

What is that policy? Really, at the end of the day, it's a piece of paper, right? It's just in your filing cabinet.

You probably haven't looked at it in a while. But out of sight, out of mind is not really a good approach with life insurance.

It's a promise from the insurance company to pay out a benefit to your family in the worst-case scenario. So that should give you peace of mind.

That can give your beneficiary financial independence, an education, a college education, pay the mortgage payments.

Now, if you own a business, that could continue the business when you pass and at the end of the day, that death benefit's completely tax-free.

So again, some of the motives behind that policy, we want to assess that as well.

Is that going to be there when you need it the most? Okay, so after we take a look at what you have, we talk about why you want it.

Assesment

Let's talk about the assessment here.

Did you know that the new life insurance is completely customizable?

It's a lot like buying a suit. You could go to the department store, grab a suit off the rack, and hope it fits, right?

But if you want the finest suit, you're going to go to a tailor and you're going to get it customized.

That's what we can actually do with the new kind of life insurance. What we can do is actually add living benefits.

So, question for you, do you know what you're going to do if you ever have to go to a nursing home or become critically, chronically, or terminally ill?

We call these, living benefits. The new type of life insurance, you can use the death benefit while you're still alive, as the policy owner and the insured.

Talk about this with your insurance agent about adding on those just-in-case benefits.

We also now have cash value that we can build up. We can give you tax-free income for retirement.

You can do college planning, so you can borrow from your policy to pay your child's tuition.

You can create tax-free income for yourself and also, if you do have cash value life insurance, completely stock market protected.

And one thing I'll end on there is life insurance, these days, can accommodate any budget.

It doesn't matter if you're young and you can only afford $200 a month or if you're really high net worth and you can do $200,000 a year, these policies are customizable to fit your needs.

So again, please reach out to your insurance agent, think about what you have, think about the motives.

Let's assess the new policy and let's run that projection on the policy that you have now to make sure the numbers really make sense.

So, I hope you found this informative. And I hope you really think about what you have versus what you want. Thank you.