Estate Planning Vault

Is It Time For a Life Insurance Audit?

• The life insurance companies have changed the tables they use in determining the life expectancy of customers. This means that even though you bought your current policy when you were younger, you may now be able to get the same coverage at lower rates.
• If you no longer need the life insurance coverage, you may be able to sell the policy for substantially more than its cash surrender value. In recent years, a robust market has developed for so-called “life settlements.” In general, buyers are looking for policies with death benefits of at least $100,000.
• If you have a “second-to-die” policy – insurance to be paid when the second of a husband and wife passes away – and one of the other insured individuals has already passed away, you may be able to trade in the policy for a new one on your life alone at favorable rates.
• Finally, if your net worth is high, a new market has developed that can get you free life insurance for two years. Known as “premium financed” life insurance, it’s complicated and not available to everyone. You have to be at least 70 years old and in good health. Some companies require you to have a net worth of at least $3.5 million, while others will go as low as $1 million. In either case, for as long as it lasts it offers the possibility of getting something for nothing, or at least nothing other than going through the process of a medical exam.

If you fit within any of the four categories above, it’s time for an insurance review. Contact your insurance agent or attorney, who can put you in touch with the right insurance professional.