Start the New Year Right: Have Your Life Insurance Policies Reviewed

As the new year begins, it’s natural to think about resolutions. Many of us set goals for health, relationships, and careers, but how often do we prioritize our financial health?

And even when we do think about our financial future, how often does that discussion include life insurance policies that were previously purchased and are in effect?  

For many (if not most) people, life insurance is viewed as a product you buy once and promptly forget about.  This is a mistake.  Life changes, and as it does, you should make sure your current life insurance portfolio is aligned with your current needs and goals.  

Working with a life insurance professional, like us here at Summit Legacy, can help to ensure that your current coverage is right for you now, while also uncovering and suggesting fixes for any issues that might be lurking with your policies and of which you were unaware.  Let’s take a deeper dive into why these reviews are so important and how the process works.

Why Have Your Life Insurance Policies Reviewed?

Life changes, and your life insurance should keep up. A policy you purchased five, ten, or even twenty years ago may no longer meet your needs. Furthermore, life insurance policies are not Ronco rotisserie chicken ovens where you can “set it and forget it.”  Rather, they are more like your car, needing occasional maintenance like an oil change or changing the tires and sometimes a bigger overhaul or repair job.

Here are some common life events and scenarios that highlight the importance of a policy review:

Outdated Policies: One of the most common situations we encounter is clients holding old policies without an agent actively managing them. These clients often feel confused by vague in-force ledgers and don’t fully understand their policy’s performance.  A review can help a client simply know and understand the coverage they actually have.

Expiring Term Policies: Many people have level term policies that are nearing expiration. Often these policies are no longer convertible, leaving clients unaware of the looming gap in their coverage.

Family and Career Changes: Have you recently gotten married, divorced, or welcomed a new child? Your coverage should be reviewed and changed to reflect these milestones.  Significant salary increases or career advancements might also necessitate adjustments to your coverage.

Health Changes: Improvements in your health, such as quitting smoking or losing weight, could mean you qualify for better rates. Conversely, health issues might necessitate a closer look at whether your policy offers adequate protection.

Disability Income Policies: We are often asked to review disability income policies, which can have weak definitions or premiums that increase by class. Clients frequently misunderstand these policies, focusing only on the monthly benefit and assuming it’s sufficient.

A Real-Life Cautionary Tale

We recently spoke to a prospective client whose experience highlighted the importance of regular professional policy reviews as well as serving as a cautionary tale for what can happen if your policies are ignored.

He had two inforce life insurance policies that were about 40 years old and he had taken significant loans out from the cash value of both.  Despite that, he had essentially left the policies on autopilot and hadn’t reviewed them in a long, long time.

Deciding he no longer needed the coverage from the policies, he approached his financial advisor about the possibility of surrendering the policies and was met with a shocking reality.  Due to the large loans outstanding on the policies, if he were to surrender them, he would receive a tax bill on approximately $350,000 in taxable income from those loans.  Even worse, there was inadequate cash in the policies to cover these taxes and his health status ruled out a loan rescue solution.

With regular reviews and proactive management of his policies, this individual could have avoided this predicament and taken the actions necessary along the way to ensure his portfolio was working for, and not against, him and his financial future.

The Benefits of a Policy Review

Having your life insurance policies reviewed by a life insurance professional can offer a number of tangible benefits.  Some include:

Optimized Coverage: Ensure you’re not over-insured or under-insured. Paying for more coverage than you need wastes money, while insufficient coverage leaves your loved ones vulnerable.

Lower Costs: A policy review might uncover opportunities to save. For instance, refinancing or converting policies could lead to lower premiums or better benefits.

Updated Beneficiaries: Over time, relationships change. Ensure the right people are listed as beneficiaries to avoid unintended consequences.

Alignment with Financial Goals: Whether you’re saving for a child’s college education or building a legacy for future generations, your life insurance should align with these goals.

Steps to Review Your Policy

When you work with a life insurance broker to review your policies, the process is guided and thorough. First, we start by gathering all your policy documents. Whether it’s term life, whole life, or supplemental plans, we’ll take stock of your coverage and its details. You don’t have to sift through dense paperwork alone – we’ll help make sense of it all.

Next, we’ll sit down with you to discuss your current life circumstances and financial goals. Has your family grown? Has your income increased? Are there new expenses, like a mortgage or tuition, to consider? Together, we’ll assess whether your existing coverage provides the right level of protection for your needs.

From there, we’ll evaluate the type of policies you have. For instance, if you have a term policy nearing expiration, we’ll explore options to extend coverage, convert to permanent insurance, or find a new policy that fits your situation. If you have permanent insurance, we’ll review the policy’s performance by examining an in-force illustration. This helps us determine if your policy is still performing as expected or if adjustments are needed.

We’ll also review your beneficiaries. Life changes, and so should your beneficiary designations. Whether it’s updating a spouse’s name, adding children, or aligning your policy with your estate plan, we’ll ensure your intentions are clearly reflected.  It is surprising how many times people forget to change their beneficiary leading to unintended consequences – such as an ex-spouse rather than the current spouse being named on the policy (and therefore able to collect the policy proceeds).

Finally, we’ll discuss any gaps or opportunities we’ve identified. This might include addressing underinsurance, optimizing premiums, or adding riders to enhance your coverage. Throughout the process, we’ll explain everything in plain language, so you feel confident in your decisions.

Common Pitfalls to Avoid

While reviewing your life insurance policies is crucial, there are some pitfalls to watch out for:

Procrastination: It’s easy to put off a policy review, but delaying could mean missed opportunities for savings or improved coverage.
DIY Approach: Life insurance is complex. Work with a broker or advisor to ensure you’re making informed decisions.
Ignoring New Products: The life insurance market evolves. New products or riders might offer features that better suit your needs.

Partner with a Professional


It’s easy to put off a policy review, but delaying could mean missed opportunities for savings or improved coverage.  You may be tempted to take a DIY approach to your life insurance policy review, but this may also lead to a less than optimal outcome.  

Life insurance is complex, and the market evolves. Working with a professional can help you avoid:

Overpaying for outdated coverage
Missing out on better options
Leaving gaps in your financial plan

As life insurance professionals with decades of experience in the industry, we at Summit Legacy specialize in helping clients navigate these complexities. Whether it’s uncovering cost savings, ensuring policies align with your estate planning, or identifying gaps in coverage, our role is to ensure your life insurance supports your financial plan.

If it’s been a while since you reviewed your policies, there’s no better time than now. Let’s start the new year with confidence, knowing you’ve taken a critical step toward protecting your financial future.

Take Action Today

The beginning of the year offers a unique opportunity to reflect, plan, and take control of your financial health. A simple review of your life insurance policies could save you money, offer peace of mind, and provide a clear path toward your financial goals.

Ready to get started? Reach out to schedule your personalized life insurance review. Together, we can ensure your policies are working as hard as you are to build a secure future for you and your loved ones.