If you think about your life a few years ago, things have probably changed quite a bit. Maybe a marriage, a divorce, a new kid or a better job. Or maybe things haven’t changed much for you. Either way, it’s probably a good idea to take another look at the life insurance policy you bought several years ago.
That’s because the changes in your life — big and small — not only impact you but the people you care about most. It takes discipline to keep your life insurance up to date.
After all, there are lots of other things you can do with your time, but when you think about it, there may be nothing more important than keeping your family or business well-protected. That’s where a Personal Coverage Review (PCR) can help.
Realize it’s not “once and done”
Too many people think of life insurance as a “once and done” purchase. You buy a policy that’s right for you at the time, throw it in a drawer and cross that line off your to-do list. It’s easy to make this mistake. That’s because buying life insurance isn’t top of mind for most people. And if you do buy it, updating it might never cross your mind. That’s where the discipline of having a regular PCR comes into play.
Answer the big questions
A PCR can take as little as 30 minutes. During this time, your financial professional will ask you questions about what’s changed since your last review, so be prepared to answer questions like:
- Have there been any big changes in your life, such as a marriage or divorce, a new child, a new job or a new home?
- Do you have any new goals, like saving for retirement or paying for college?
- Have you had any new health issues?
- Have you received an inheritance?
- Are your beneficiaries up to date?
Your answers to these questions could indicate a gap in the life insurance you have and what you actually need. For example, your paycheck is probably a lot bigger with your new job. But as you earn more, you become underinsured relative to your lifestyle. Even regular pay raises over the years can add up to a significant gap in your coverage. A PCR will reveal this gap and put you back on track to ensure you’re properly covered.
Build a trusted relationship
Your financial professional understands the importance of building a trusted relationship with you. A regular PCR will give you the confidence to know that your life insurance needs are being met.
It’s easy to want to meet with your financial professional during challenging times but when things are going well, it can be difficult to justify meeting with your financial professional. That’s why a regularly scheduled PCR is so important — it doesn’t matter if your situation is good or not-so-good at the moment.
Of course, because of the world we live in, there are a lot of anxious people with a lot of questions. A PCR can alleviate anxiety in one major part of your life — your finances. And, with video conferencing technology, PCRs are much easier to do than meeting face to face in a more formal setting.
Reassess your options
A PCR should be scheduled at least annually and perhaps more often, depending on your situation. In addition to keeping your coverage up to date, a PCR can provide other advantages. For example, your policy might have features and guarantees that can be used now that your life has changed. Or there may be new loan options that give you the ability to use the cash value in your policy to help pay for whatever you want in life, like buying a new home, starting a business or paying for college.
Whatever your circumstances, you should consider scheduling a PCR with your financial professional. By taking this step, you’ll come away knowing your needs are being met, like the 69% of consumers that feel relieved knowing their loved ones are financially protected with life insurance.*
If you’d like to learn more about PCRs, or how Penn Mutual can help you achieve your goals, contact one of our financial professionals.
*2019 Insure Your Love Consumer Survey, Life Happens
This post is for informational purposes only and should not be considered as specific financial, legal or tax advice. Depending on your individual circumstances, the strategies discussed in this presentation may not be appropriate for your situation. Always consult your legal or tax professionals for specific information regarding your individual situation. Accessing cash value will reduce the policy death benefit and may require additional premium to keep the policy in force.