The Short Guide to Reviewing An Insurance Policy

Financial plans should include insurance policy reviews. This periodic review is essential. The easiest way to organize and review insurance policies is to create a one-page policy summary for each policy.

Most insurance policies have vital information on the declarations page or “policy summary.” That’s where to find most of the information you want to review. You can create your own using Excel, Word, and even paper. Write down the relevant information in an understandable way that you can recall.

The Basics to Review Insurance specialists such as Your Life Insurance Solution‘s Michael Brohawn suggest reviewing the following basics:

Policy type The type of insurance policy may be auto insurance, casualty insurance, health insurance, life insurance, or long-term care insurance.

In life insurance policy reviews or summaries, specify the type of life insurance policy. It could be term life, universal life, variable life, or whole life.

Insurance carrier In performing the audit, specify the insurance company providing the policy. Keep a handy way to reach customer service or the insurance agent.

Policy Number Know your policy number. You need it when you make inquiries about an insurance policy.

Date of Issue This point is vital in any insurance policy, especially with life insurance policy reviews. Know the date of issue of the insurance because term insurance has an expiration date. However, permanent insurance will feature a surrender charge that may apply if you cancel the policy in the first five years or the first twenty years.

Premium Track your premium and the frequency of payment. For a whole life insurance policy, the policy may be "paid up."

Insured Who do the benefits apply to – a dependent child, your spouse, or you?

Beneficiary Who is the beneficiary in the case of life insurance? You can contact the insurance company to effect a change through a change of beneficiary form. The insurance company will get the proper form (not a will or trust) when you send it back.

Life Insurance Policy Reviews For life insurance, track total death benefit. Also, track any additional riders such as the ability to access the death benefit early as in diagnosis with a terminal illness.

With a term policy, have a reminder of the year the policy would expire. You can then evaluate your options to assess if you still need life insurance coverage.

With life insurance policy reviews, you can track investment performance if your policy has a cash value. Call the insurance company and ask for an “in-force illustration.” This illustration projects how the policy should perform from this point until your life is over.

You may forgo premiums if the policy has done well and will continue so. Otherwise, you may need higher premiums to keep it in force.

Reviewing policies in regular periods can help anticipate these future trends. Michael Browhawn and Your Life Insurance Solutions can help you with more beneficial information about your insurance policies.