Q4 is when year-end financial planning takes center stage.
Advisors are reviewing portfolios, evaluating tax strategies, revisiting estate plans, and preparing clients for the year ahead. But one asset can easily be overlooked: life insurance.
A policy purchased years ago may no longer align with a client’s financial situation or long-term goals. At Abacus Life Solutions, we believe year-end planning is a natural opportunity to give those policies another look.
A Lot Can Change in a Year
A client may have retired, sold a business, experienced a change in health, updated an estate plan, or simply shifted their financial priorities.
As advisors conduct Q4 reviews, consider asking:
- Does the client still need the original death benefit?
- Have premiums become more difficult to justify?
- Have estate or legacy goals changed?
- Does the policy still support the client’s current financial objectives?
- Does the client understand all of their options?
Sometimes the answers will reinforce the decision to keep the coverage. Other times, they may indicate that it is worth exploring alternatives.
Make Life Insurance Part of the Year-End Review
Advisors regularly evaluate investments to make sure they remain aligned with a client’s goals. Existing life insurance deserves similar attention.
A client may have purchased coverage decades ago for income replacement, estate planning, or business succession. Today, that original need may have changed or disappeared entirely.
Q4 provides an opportunity to determine whether the policy still serves its intended purpose.
Before Surrendering or Lapsing, Understand the Options
If a review reveals that coverage is no longer needed, surrendering or lapsing the policy may seem like the obvious next step.
For eligible policyholders, a life settlement may provide another option.
A life settlement allows a policyholder to sell an existing policy for a lump-sum payment. For qualifying policies, the proceeds may exceed the cash surrender value while eliminating future premium obligations.
A policy valuation can help advisors and clients understand whether this option is worth considering before making a final decision.
Start the New Year With the Right Strategy
Year-end planning is an opportunity to make sure every part of a client’s financial strategy still works together.
Adding life insurance to the Q4 review can help advisors identify policies that remain valuable, as well as policies that may deserve a different strategy.
Before another year begins, make life insurance part of the year-end planning conversation.
Give Your Clients’ Policies a Year-End Review
If a policy may no longer fit a client’s financial goals, consider evaluating its potential value before surrendering or lapsing the coverage.
