This is the sixth exercise in a series designed to walk you through an entire financial plan. The exercise is embedded in an Excel spreadsheet you can download and save for personal use. You can find the backdrop for the exercise HERE or just jump right in with the instructions given below:
This app is designed to help you determine what your life insurance needs are for final expenses, debts and mortgages, education, and income replacement. If you conclude that you have policies you don’t need or want, and you’ve confirmed your research with an independent planner who does not accept commissions on the sale of life insurance, then you should have several options for terminating your policies. These will differ from policy-to-policy, so check with your insurer. But don’t make those decisions hastily. Even if you shouldn’t have purchased the whole life insurance policy you bought 15 years ago and don’t need or want it now, in some instances it will make sense to keep it.
Requesting an “In-force Life Insurance Illustration” and a “Policy Cost Basis Report” from your agent (or the insurance company’s home office) will help you and your independent planner determine whether the policy should be kept or surrendered based on the investment value, future prospects for growth, stability of the insurer and tax consequences of liquidating.
Additionally, if you are considering replacing a current policy with a new policy that is more appropriate or economical, it is very important that you do NOT cancel any existing policies until you have received and paid for the new policy. This is to ensure that no issues arise throughout the course of your underwriting that would disqualify you from receiving the new insurance policy.
Especially in these economic times, it is important to ensure that every dollar of yours is working hard for you, and that includes the dollars channeled toward life insurance.
Click HERE to access the app!