LABJ Stock Index: February 20

Review Your Life Insurance Policy Now

Recent volatility has impacted nearly every aspect of investment portfolios. But you may not be thinking about how it impacts your permanent life insurance policy. While a decline in your investment portfolio can be worrisome, those same investment losses in certain permanent life insurance policies can lead to issues that can affect how much you pay in premiums or how long your policy will last. It’s important to remember that life insurance policies are predicated on assumptions, and actual performance can vary.

Conducting a life insurance policy review can help you evaluate if your policy is performing up to expectations and if it still works in harmony with the rest of your wealth plan. For example, a policy review can:

• Help you see if aspects of your current policy may be impacted by market volatility or interest rate changes, such as cap rates and policy duration.

• Stress test your policy against various market conditions and assumptions to ensure your policy can hold up in different environments.

• Encourage you to work with your provider for recommendations to get you back on track, such as increasing your premiums to offset performance issues or exchanging your policy to prevent a shortfall of cash value and the subsequent lapse of the death benefit.

• Allow you to explore other policies in the market today, as features, benefits and costs change over time.

Even if you don’t have a policy with performance that is tied to the market, an annual life insurance policy review is a good practice. A policy review can help you:

• Ensure that your policy still aligns with your goals

• Adjust as the insurance industry evolves

• Evaluate the health of your policy 

• Make changes sooner rather than later 

• Confirm that the policy’s ownership and named beneficiary are correct

A policy review can confirm that your policy is performing as you thought it would.

You’re not alone in navigating the markets and evaluating how different factors might affect your life insurance policy. In the best of circumstances, a policy review can confirm that your policy is performing as you thought it would. This means you can relax, knowing it continues to align with your goals.

Rick Barragan is the Managing Director, Los Angeles Market Manager, for J.P. Morgan Private Bank.
[email protected] | (310) 860-3658
privatebank.jpmorgan.com/los-angeles