Policy Reviews: Where Has Your Life Taken You? INDIVIDUAL LIFE INSURANCE A Consumer Resource

Transcription

1 INDIVIDUAL LIFE INSURANCE A Consumer Resource Where Has Your Life Taken You? Policy Reviews: An Effective Way of Helping Achieve Your Long-Term Life Insurance Objectives

2 Policy Review client bro 2.qxp:Policy Review brochure 6/17/09 9:44 AM Page 3 F AM i l y Life is a journey full of changes and with each change, your financial needs may evolve. INSURANCE PRODUCTS: NOT INSURED BY FDIC OR ANY MAY LOSE NOT A DEPOSIT OF OR GUARANTEED FEDERAL GOVERNMENT AGENCY VALUE BY ANY BANK OR ANY BANK AFFILIATE 2 FDIC BANK

3 Y ou check your monthly bank statements, review your stock portfolio and mutual fund holdings, and you track your 401(k). Why should your life insurance coverage and its death benefit which often provides income protection for your family and upon death, a liquidity source to shield other assets be any different? You recognized your need for life insurance and purchased a policy with the coverage and features that best suited your needs. However, are you sure that policy is still accomplishing your goals? Life is a journey full of changes and with each change, your financial needs may evolve. Sometimes it may not even take a dramatic change to affect your strategy; the simple passing of time may be enough. As a result, your life insurance coverage should be reviewed on a regular basis to ensure that all of your objectives are still being met. And if they are not being met, you can take action before it is too late. Life insurance policies contain fees and expenses, including cost of insurance, administrative fees and premium loads, surrender charges and other charges or fees that will impact policy values. 3

4 If you realize the importance of life insurance as part of your financial strategy, you should realize how important it is to make sure the coverage is adequate enough to meet your goals. Only a regular review of your coverage with your financial professional can help ensure that your goals and current coverage are still aligned. Your financial professional is specially trained to recognize events that may slip under your own radar and may also be affecting your coverage. In addition, your goals themselves may have changed. It is a good idea to meet with your financial professional on an annual basis to discuss your current situation and goals and submit your policy or policies for review. A policy review is not always a precursor to purchasing additional coverage. In actuality, there are four potential outcomes: Coverage Effectively Meets Goals Many times, a policy review will simply provide you with the confidence that you and your family have adequate protection and your life insurance meets its financial objectives. Your circumstances are similar enough to when you purchased your coverage that no changes are needed at this time. Coverage ineffectively Meets Goals In this situation, you find that you have enough life insurance coverage to meet your stated objectives. However, given current life insurance pricing and product availability, you could either be purchasing more coverage for the same amount of premium, or you could be receiving the same coverage for a lower premium. Your financial professional can formulate a detailed analysis, taking surrender charges, any outstanding loans, death benefits and cash values into account to help determine what course of action, if any, is in your best interest. Coverage exceeds current needs In rare instances, you may find that your life insurance coverage is exceeding your needs. Your options may include maintaining the coverage as a cushion for future needs, decreasing a face amount, or surrendering a policy (which could incur a surrender charge). Coverage does not meet current objectives In this case, your coverage no longer meets your current needs. Your financial professional can work with you to determine your best strategy. Your options may include increasing your coverage under a currently owned permanent life insurance policy, purchasing a new policy to supplement the original(s), or purchasing a new policy with enough coverage to replace the original(s) and meet your current needs. 4

5 what events could effect my coverage? what s covered in a policy review? While regular reviews are important, certain events are more likely to have an impact on the effectiveness of your coverage. Following is a list of events and life changes that often signal a change in life insurance needs. If you have experienced any of these since your last policy purchase or review and do not have a review scheduled soon, you should consider initiating one with your financial professional. Life changing events: Change in job status, including a new job or promotion Marriage, divorce, or death of spouse Birth or adoption of a child Child or children left the nest Purchase of a new home Experience significant change in assets, such as high losses, gains or an inheritance Increase/decrease of debt load This list is not meant to be exhaustive. Your individual circumstances will guide your policy review. A proper policy review involves more than a simple death benefit analysis, though that is an important part. Your financial professional will review all aspects of your coverage. Death Benefit: If your goal is income protection, is your death benefit large enough for your family to maintain today s standard of living? If your goal is estate protection, would your current death benefit cover today s estate settlement costs? Annual Premiums: How much are you paying for your coverage, and can your goals be met more economically? Ownership Structure: Is the current policy ownership the most effective for your goals? Your financial professional can help you understand the tax implications of different ownership structures and see if your current structure is really best for you and your beneficiaries. Beneficiary Designation: Are your current beneficiary designations up-to-date? Birth, deaths, marriages and divorces could all have an 5

6 Policy Review client bro 2.qxp:Policy Review brochure 6/17/09 9:44 AM Page 7 the benefits of working with your financial professional about the hartford impact. Founded in 1810, The Hartford Financial Services On the surface, it may seem like life insurance is Group, Inc. (NYSE: HIG) is one of the nation's something you can purchase and then either largest investment and insurance companies with forget or self-monitor. However, as you can see, international operations in Japan, Brazil and the a proper policy review is an involved process. Your United Kingdom. With 2007 revenues of $25.9 financial professional can simplify it for you by billion, The Hartford was ranked 82nd on the 2007 knowing where to look, what to look at and how to Fortune 100 list. To millions of customers analyze it. And, should changes be needed, your businesses, groups and individuals The Hartford s financial professional can facilitate the process. stag logo is a trusted symbol of dependability. It is important to keep this significant part of your The Hartford meets a wide range of life insurance overall financial plan from becoming obsolete and needs with a complete line of cost-effective, and ineffective. By setting aside some time for an annual innovative life insurance products. Life insurance policy review appointment, you may save your policies are issued by either Hartford Life and beneficiaries a lot of time, frustration and money, Annuity Insurance Company or Hartford Life later. Insurance Company. Both companies maintain high ratings from independent rating agencies. Ratings apply to the issuing company and its general contractual obligations. They do not apply to any product. In addition, financial professionals and policyowners can count on The Hartford s award-winning customer service team to patiently address questions and accurately process policy changes and claims. The DALBAR Life Insurance Customer Service Award and Financial Intermediary Award recognize the highest tier of service in the industry. [DALBAR Life Insurance Customer Service Award recipient and Financial Intermediary Award, ] 6

7 Policy Review client bro 2.qxp:Policy Review brochure 6/17/09 9:44 AM Page 8 By setting aside some time for an review annual policy appointment, you may save your beneficiaries a lot of time, frustration and money, later. 7

8 This information is written in connection with the promotion or marketing of the matters addressed in this material. The information cannot be used or relied upon for the purpose of avoiding IRS penalties. These materials are not intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, you should consult your own tax or legal counsel for advice. The Hartford is The Hartford Financial Services Group, Inc. and its subsidiaries, including the issuing companies of Hartford Life Insurance Company (New York) and Hartford Life and Annuity Insurance Company (outside New York), Simsbury, CT. The mailing address for both issuers is P.O. Box 2999, Hartford, CT The Hartford is a proud supporter of the Life and Health Insurance Foundation for Education, a nonprofit organization LIFE. The Life and Health Insurance Foundation for Education is not affiliated with The Hartford. LIF8424 LCM Printed in U.S.A The Hartford, Hartford, CT 06115