Every September, Life Insurance Awareness Month highlights the important role life insurance can play in protecting families and supporting long-term financial plans.
But life insurance awareness should not end once a policy is purchased.
For financial advisors, this month is also an opportunity to revisit the policies clients already own and ask an important question: Does this coverage still fit the client’s financial plan today?
At Abacus Life Solutions, we believe understanding an existing policy and the options available for it is an important part of comprehensive financial planning.
Life Insurance Needs Change Over Time
A policy purchased 10, 20, or even 30 years ago was designed around a client’s needs at that point in their life.
Since then, a lot may have changed.
A client may have retired, sold a business, paid off a mortgage, accumulated additional assets, changed their estate plan, or watched their children become financially independent. At the same time, premiums may have increased or the policy may simply no longer serve its original purpose.
That does not necessarily mean the coverage should be terminated. It means the policy deserves another look.
What Should Trigger a Policy Review?
Advisors routinely review investment portfolios, retirement strategies, and estate plans as clients’ circumstances change. Life insurance should be part of that process.
A policy review may be especially valuable when a client:
- Enters or approaches retirement
- Experiences a significant change in financial circumstances
- No longer needs the original death benefit
- Faces increasing premiums
- Sells a business or completes a succession plan
- Updates an estate or legacy plan
- Needs additional liquidity for retirement, healthcare, or other expenses
Even when keeping the policy remains the best option, reviewing it can help confirm that the coverage continues to align with the client’s goals.
Awareness Means Understanding Every Option
When clients decide they no longer need or want a life insurance policy, they may assume their choices are limited to surrendering the policy or allowing it to lapse.
For eligible policyholders, there may be another option: a life settlement.
A life settlement allows a policyholder to sell an existing life insurance policy to a third party for a cash payment. The buyer assumes responsibility for future premiums and receives the death benefit when the insured passes away.
For qualifying clients, the proceeds may exceed the policy’s cash surrender value and provide liquidity that can be redirected toward current financial priorities.
Make Life Insurance Part of the Financial Planning Conversation
Life Insurance Awareness Month is an opportunity to think beyond purchasing new coverage.
It is also a reminder that existing life insurance should evolve alongside the rest of a client’s financial plan.
Advisors can use September as an opportunity to revisit older policies, identify coverage that may no longer serve its original purpose, and make sure clients understand the options available to them before surrendering or lapsing a policy.
Because being informed about life insurance is not just about knowing when to buy it. It is also about knowing what to do when life changes.
Give Existing Policies a Second Look
If you have clients with life insurance policies that may no longer fit their financial goals, a policy valuation can help determine whether a life settlement could be an option.
