That is right, the life insurance policy purchased years ago is now dead. There was a time the policy had a pulse and there were many happy policy holders and agents. Everything in life ages at some point. With life insurance, if nothing is done, it can leave a family high and dry at claim time.
There is a cost of insurance built into any insurance policy. Life insurance is a policy that most will typically keep longer than any other. Overtime, all costs will raise. Let's face it, a gallon of milk and a loaf of bread are close to double to what they were 10-20 years ago. Eventually, the policy will lose steam, slow and eventually come to a sudden halt. Some policies allow you to keep funding the policy at an additional cost, but it's only playing catch up. Like any other financial product you have, mortgage or credit cards for example, playing catch up will only result in a disaster.
Even your auto and home insurance policies you end up changing at some point due to life changes that are a little more obvious. This includes, but not limited to, change of cars, purchasing more toys to be insured on your homeowners, your kids start to drive, or financial struggles force you to make policy changes to make it more affordable since we have to have it. Most people react on emotion caused by immediate pain. With life insurance, the immediate pain, or emotion, related to the purchasing, rarely occurs. However, someone may have a second shot at having not enough coverage for your auto and homeowners insurance. We would learn from the loss, make adjustments on the insurance policy and move on. Life insurance is less forgiving because the policy holder only has one shot, and hopefully they made the right choice.
If there are no adjustments on the life insurance, like one would do on other insurance policies, at the time of claim, there is no recovering. Hence, the one shot. One could make adjustments on their own policy after seeing an experience happen to a close friend or family member. However, that close friend or family member doesn't have a second chance. Not even a chance to start over.
The good news is, most American's have that second chance, right now. By reviewing all of the household life insurance policies, there is a good chance one could save money by consolidating policies and streamlining the financial goals of the family. There is also the chance, after the review, one could be paying more than all the current life insurance policies combined. Even if that is so, the good news is, now there is a financial plan in place that will fit the goals of your family. Possibly for years to come when done right.
Be sure to meet with an insurance professional with experience in financial planning on a regular basis to discuss life insurance. Life insurance is not a one shot and your done. It is an ongoing process. If life insurance is not reviewed on a regular basis, your family may only have one shot. With as many life changes, that is not a whole lot to bet on.
Butch Zemar
www.EliteBenefits.net