Replacing Your Current Life Insurance Can Be A Smart Move
Why Would You Want To Replace Your Current Life Insurance?
There is a mindset with life insurance that once you have it in place, don’t mess with it. This is sound logic if you are satisfied with what you have and you know for a fact that it is the best product at the best price. Where that logic breaks down is when you, the owner of the life insurance policy, haven’t really done your due diligence.
You Did The Right Thing!
I know from having talked to thousands of people who bought life insurance that the hardest part of it was just getting it out of the “to do” box and initiating the process of actually searching for and buying life insurance. In fact, once it’s out of that box, most people take the path of skipping the “searching” part of the process and just go buy it. It is successfully out of the to do box and into the done box, so you did the right thing. You are far ahead of all of those who just never quite grasp how important it is to not leave the future of their family, if something unforeseen does happen, to GoFundMe.
So back to that question above. Do you know for a fact that you got the best product at the best price or did you just “get it done”?
Is The Best Life Insurance Policy At The Best Price Really Important?
I know that in my life if there are two items that accomplish exactly the same thing and one leaves a lot more money in my pocket than the other, well, it becomes a no-brainer. Better your pocket than theirs, right? One of the debates that will go on forever is are you better off paying more for permanent life insurance than considerably less for term life insurance. That is far less complicated than it would seem. It all comes down to what your real need is.
Another thing that most life insurance consumers never know is that prices on life insurance from company to company can vary to a ridiculous degree. If you’re a 45 year old guy in great health and want $500,000 of 20 year term life insurance it can cost anywhere from $46.67 a month to $69.23 a month. Only $23 more a month, $276 a year or, over the life of that 20 year term, $5520 more. That difference is for the exact same product, just coming down to if you buy from the right company or not. You have to use the right agent to make sure you end up with the right company.
Is This The Right Time To Change?
Three things come to mind when I consider that question. How has Covid affected buying life insurance? Is the price of life insurance still going down as it has been for the last 25+ years? Do you still need life insurance?
Last question first. Yes, there is almost always a point when it no longer makes sense to carry the larger amounts of life insurance that we needed for family and mortgage protection. So, maybe it’s worth considering replacing your larger policy with a smaller one that goes on longer. If your assets dictate that you don’t need life insurance at all, maybe it’s time to consider selling your policy. If you could get back everything you’ve paid for a life insurance policy now that you don’t need it anymore, is that a good idea?
Covid has actually made buying life insurance easier with a lot of companies. Like the rest of the country, life insurance companies have had to get creative to keep business flowing. The best solution to that has been to make life insurance easier and quicker to obtain with accelerated underwriting products. This often means no application to sign and no exam or medical records to deal with. It can be as easy as a phone interview.
I saved price for last. The price of life insurance is no longer going down. For years I encouraged those that needed permanent insurance to get it while it was inexpensive. While there are a few companies that still have good deals, the majority have raised the price of guaranteed universal life by as much as 40% in the last year. Companies are taking that route to drive those who want permanent products into a choice between higher priced guaranteed products, of policies that are not fully guaranteed.
The price of term life insurance has bottomed out and is going up with a lot of companies. This is not a time to think about it next year.
Bottom Line
I could write a book on all the reasons that you should evaluate your life insurance to make sure it still meets your needs and that you, indeed, have the best value. Instead of a book I am offering you the short story. If your life insurance agent hasn’t stayed in touch and kept you in touch with how your policy is matching your needs, it’s time to talk to someone who can at least make you comfortable that you are still on track. I’m a no pressure kind of guy and can do that for you. My name is Ed Hinerman. Let’s talk
