Tom’s Life Insurance: Uh Oh, Now What?

Tom’s life insurance policy is about to go away. But the need for it lives on.

Time flies. Tom bought a policy at an extremely low cost, guaranteed for the first 20 years. Who knew that 20 years would go by so quickly? Beginning in year 21, however, the cost began to go through the roof.  It’s going to be the opposite of inexpensive going forward.

These days, there are alternative policies available for Tom’s consideration. Now after 20 years, the cost will be more, but still much more affordable than continuing the existing policy.

After all this time his health is a bit less favorable than it was in the earlier years. And that adds another 12% on top of the cost for being age 46. Still, it allows his family to continue to be protected, and he can afford that increase in premium.

It could have been worse.

If Tom had a complicated and bad health history behind him he might not have been able to get the new coverage at all. Fortunately, that’s not the case here.

It also could have been better.

Let’s suppose one of his advisors had recommended he consider that at age 35, age 46 was just around the corner. With a proper review of the policy and some proper planning, he could have avoided today’s significant increase entirely, and at a more affordable rate.

Fortunately, this story has a happy ending. Tom and his family are going to continue to be fine. But let’s be clear about the point that both you and your clients would be better served by reevaluating those dusty old policies every five years or so.


Independent Policy Review

The insurance world can be difficult to navigate. Without a clear understanding of their current plan, it’s difficult to be certain that your clients have the right coverage. If you’d like to take a closer look, you’ve come to the right place. We can answer your life insurance questions and provide the clarity you need to sleep easy. Learn more about our services or join our newsletter today. To contact us, click here.

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