Life insurance is an extremely important asset for a myriad of reasons, most of all the financial security that it provides to your family in the event of an untimely death. For individuals with a high net worth, life insurance provides significant help for payment of the estate tax. In addition to the financial security it provides for your family, life insurance is also an excellent vehicle to hold assets during lifetime especially in Florida, where it is statutorily protected from creditors.
Although the benefits of life insurance are obvious, it is an asset that can be extremely frustrating especially when not monitored closely and often. This post will focus on the ways in which you can more effectively monitor your life insurance policies in order to obtain the maximum overall benefit.
The first and most apparent factor that should be monitored is the premium. It is possible that your policy can be over-funded and premiums may be lowered or no longer necessary at all to cover the policy costs for the duration of coverage. Alternatively, you may realize that you need to increase annual premium payments in order to fund the policy for the duration of coverage.
An additional factor that should be monitored is the allocation of the cash value. People often forget that whole life insurance policies do contain an investment aspect which can affect the bottom line of the policy. If your policy has been fully funded it may be advisable to re-allocate the cash value to a more conservative asset allocation in order to reduce any risk. On the other hand, if your policy is under-funded, you can re-allocate to a more aggressive asset allocation in order to increase the cash value.
Finally, some policies can simply be too expensive, in which case it may be possible for some of the incidental benefits to be reduced. Likewise, if the policy is not too expensive it may be possible to add on additional benefits as part of your current policy.
Regardless of your financial situation, a life insurance policy is an asset that should not be ignored. Additionally, should you have any questions about your life insurance or the need for life insurance as part of your overall estate planning, please do not hesitate to contact the Morris Law Group.