As part of the coverage couple’s FAQ series, we’ll be answering the question “Can my life insurance be adjusted, increased or decreased down the road?”
Can life insurance be adjusted, increased or decreased:
This one’s easy, the answer is absolutely, YES! Life insurance is a flexible and dependable solution, but that solution only works if it addresses YOUR situation. While we’ve never encountered a situation where someone actually needed to lower their life insurance, we have encountered many situations where they either needed to find a more affordable solution, or convert some of their coverage into a different policy type. It always comes down to suitability.
For example, one of our main specialties is mortgage protection. These policies pay off your home in full in the event of premature death before you satisfy the lending bank’s note. A specific type of life insurance would satisfy the remainder of the home loan, and if structured right should also have a residual amount to cover property tax and utilities (something few advisors and even less consumers consider).
It seems to make sense when they pay their mortgage off, policy-holders then consider terminating that coverage. While terminating coverage might save a few dollars each month, with a closer look we always find new assets and real property acquired throughout the time it took them to pay down their mortgage. While the carrier answers to and abides by the clients’ wishes, as consultants we wouldn’t be faithful to our due diligence if we didn’t that client aware on average for every ONE dollar they’d save by canceling their policy, they’d be forfeiting TWO THOUSAND dollars in coverage. That’s the usual purchase power of life insurance on average! So next time you’re in the checkout line and see those Resee’s for two-bucks, remember…you can either enjoy the taste of those calories for 20 seconds, OR secure $2,000 tax-free dollars for you and your family’s future prosperity.
Something else important is many policies have a special feature called “guaranteed insurability” or “option to renew” clause. This is a little known BIG deal, because not only does it secure your ability to explore several solutions when the policy matures (completes its term), it also locks your health in! That’s a slam dunk.
THIS is the biggest factor when it comes to making smart adjustments over time to your policies. It gives you all the latitude to choose a continuance of your policy, converting it to another type like permanent or whole life insurance. When we mentioned “locking in your health,” that’s like freezing time. Although it’s not quite the super-power it sounds like, it guarantees your ability NO MATTER WHAT to preserve future choices to refine your coverage as you see fit. But the BEST part is, when you convert or rollover your coverage into another type, you won’t be penalized or surcharged for any health issues you’ve experienced over those past 20 or 30 years…it’s as though you’re turned back the clock.
In closing, if you suffer with health issues during the life of that policy, no matter how severe or prolonged, with the “Option to renew” you can lock in permanent peace of mind. We can explain these details, options, and clauses to you if having options today AND in the future is important to you.
We commit to conducting deep investigative research for you, and would like for you to reserve time with us, without any cost or obligation. We’ll carefully listen, and then follow up with a proven, practical, custom proposal for your review. HERE is our official invitation to take part in The Coverage Couple Challenge, where EVERYONE WINS. Visit the Scheduling Page at thecoveragecouple.com to see how much we can save you on your existing coverage, or provide a financial risk assessment and needs analysis for your review if you’re unprotected and univested. We hope to hear from you soon, because your life is worth the investment! -Aaron & Sarah, The Coverage Couple