Feb 02, 2017

How to Conduct an Insurance Inventory Review

By Heather Kelly

The beginning of a New Year is an especially opportune time to put our affairs in order. We recognize the value in becoming better organized and tying up any loose ends that, despite our best intentions, we may have overlooked during the year.

When purchasing insurance – whether it’s life, disability or long-term care insurance – most people tend to regard their policies on a “set it and forget it” basis. They typically pay their annual premiums, put their policies in a drawer, and promptly forget about them.

Which is fine, of course, until changes occur in your life and as we all know, change is the only constant. So, with that in mind, I’d like to provide you with a checklist to determine what might be relevant to your personal situation concerning your insurance assets.

Beneficiary Designations

Great things happen in life – marriage and the birth of children – and sometimes not-so-great things – divorce, accidents or illness. Whatever changes may have occurred in your life, you must consider whether those circumstances affect your decision about who the primary beneficiary is on your insurance policies. And if they do, you must make sure to alter your policy immediately to reflect your new beneficiary selection.

Coverage Review

Often, people forget the amount of insurance coverage they have purchased on their policies. The New Year is a great time to review all your policies to make sure that your existing coverage is sufficient and in alignment with your current economic circumstances. This is especially true of personal disability insurance. If you discover that you need to make adjustments to your coverage amounts, then this is an appropriate time to do it.

This recommendation also applies to all other forms of insurance that you might own. For instance, when your property and casualty insurance comes up for renewal, it is important to determine whether your coverage amounts are adequate. If a contractor is performing work on your house and there’s a slip or fall resulting in injury, are you certain your assets will be fully protected?

Is your car insurance adequate? Do you have sufficient uninsured motorist coverage? Are you eligible for and would you benefit from umbrella insurance coverage?

Though it is wise to ensure that your coverage amounts are sufficient to protect you from any liability or harm, it is also possible that you might be “over-insured”. As I previously mentioned, people tend to forget what they’ve purchased and based on their present circumstances, they might have more coverage than they need. If that’s a possibility, I would recommend a complete review of all your policies with your financial or insurance advisor in order to make a proper assessment.

Safeguarding Your Records

Most insurance companies and financial advisers now have client portals through which clients can access their personal account information. Like all websites which store vital personal information, security is a major issue. It is a good idea to routinely access your account and regularly change your passwords. It’s also important to make sure that all your personal contact information is up-to-date – mailing address, email address, phone numbers, etc.

Also, it is critically important that your primary beneficiary knows exactly where and how to locate your insurance policies and records. Whether the documents are kept in a fireproof home safe, or in a bank safety deposit box, or kept offsite at a financial adviser’s office, your primary beneficiary should know precisely where to find them, in case of an emergency or other life event.

Consult with Your Adviser

Making the right insurance choices can sometimes seem a bit daunting. We are an industry that uses lots of complex terms, abbreviations and acronyms that can create confusion and uncertainty. I’ve been in the insurance industry for a long time and even I sometimes get confused by the terminology.

That’s why it always advisable to consult with your financial adviser or insurance provider to make sure that you have a clear understanding of exactly what you’ve purchased and the full extent of your coverage.

Disclosure: Any guarantees and protections are subject to the life insurance company’s claims-paying ability. Life insurance products are not a deposit, not FDIC-Insured, not insured by any federal governmental agency, not guaranteed by any bank or credit union, and may go down in value. United Capital Risk Management, LLC (UCRM) makes recommendations based on the specific needs and circumstances of each client. UCRM does not provide legal, accounting or tax advice. Investors should consult their tax professional with questions about their particular circumstances. IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this document is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter that is contained in this document. UCRM is an insurance agency and a subsidiary of United Capital Financial Advisers, LLC (United Capital).

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