Life Insurance policies are not a vehicle where you set it and forget it. They need to be reviewed every few years to ensure they are performing as expected, but also to confirm that they fit into your overall financial plan.
We often meet with newer clients who have life insurance policies that have been in place for years. The last time they reviewed it was the day they put it in place.
They continue to pay the premiums with minimal thought.
This was the case with one of our newer clients. About 20 years ago, he signed up for a variable universal life policy – it made sense at the time. His business was still in its early stages and he had a young family at home that he needed to protect. He needed the death benefit and a vehicle to save for retirement.
Over 20 years, things changed.
His business was successful. He was able to build up personal assets, enough so that his wife could live comfortably if anything were to happen to him. His children are out of college now working on their own.
Insurance costs were eating away the growth of the investments within the policy.
Our team started working with him and prepared a full financial plan for him and his wife. This process provided them with a clear, objective viewpoint of their current situation and potential improvements.
Ultimately, he concluded that he needed to keep some form of life insurance in place for a few more years.
We worked with the insurance agent to get a term policy in place. The premiums were significantly less than what he was paying before.
We moved the investments to a brokerage account that would allow for growth without being hampered by high insurance costs. He and his family are in a much better position after going through a full review and analysis with our team.
We encourage everyone to review policies annually, and lean on your trusted advisor to help you navigate through the various strategies to improve your situation.
For informational purposes only. Not intended as investment advice or a recommendation of any particular security or strategy. Past performance is not indicative of future results. Information prepared from third-party sources is believed to be reliable though its accuracy is not guaranteed. Opinions expressed in this commentary reflect subjective judgments of the author based on conditions at the time of writing and are subject to change without notice.For more information about Wealth Dimensions, including our Form ADV Part 2A Brochure, please visit https://adviserinfo.sec.gov or contact us at 513-554-6000. Please be advised that this material is not intended as legal or tax advice. Accordingly, any tax information provided in this material is not intended and cannot be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer.