Changes in Family and Business Dynamics Help
Drive Need for Life Insurance Policy Reviews

Executive Summary

Life insurance is often a key component in financial, business, and estate plans. Changes to the dynamics and goals of your family, your business, and your estate may have a corresponding impact on what is required of your life insurance. These changes may trigger a need to review your policies.

Key Points

  • Changes in family goals and dynamics - There are common lifetime events that may trigger an inspection of your life insurance portfolio, such as marriage, the birth of a child, a promotion, inheritance, or the purchase of a home. In addition, other lifetime events such as divorce, nearing retirement, and shifting financial concerns may prompt a review as well.
  • Changes in business goals and dynamics - A number of events or changes in a closely held business’ dynamics should prompt a review of the ownership structure, beneficiary designations, performance, and premium funding levels of any insurance policies in which the business or business owners have an interest.
  • Changes in estate planning goals and dynamics - Life insurance may provide an efficient, timely means of providing liquidity to pay estate taxes. As estate tax laws are modified and family wealth transfer goals change, it is important to review policies so they continue to meet expectations.
  • Policy performance - The timely evaluation of a policy may expose issues and create opportunities for improvement. Factors such as the carrier’s financial strength, improved mortality tables, and the improved health of the insured should be considered.
  • Tax considerations - The Internal Revenue Code contains a number of provisions specific to the taxation of life insurance, and new tax laws, regulations, rulings, or cases continue to develop. Identifying tax objectives and reviewing policy ownership, beneficiary designations, and funding levels with a tax advisor would be advisable to help confirm all favorable tax benefits are achieved.

Conclusion

Financial plans comprise many inter-related components, and your life insurance is an integral part. The coverage you need is affected by changes to your family, business, and estate planning goals and dynamics. A policy review may help determine that you have the appropriate insurance at the proper rate to meet your needs and support your goals.

 

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Need for Life Insurance Policy Review

"Has your life, family and business remained exactly the same since the day you applied for that life insurance policy?"


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