Many factors go into purchasing a life insurance policy that suits your needs. And, like any part of your overall financial plan, your insurance program doesnât end once youâve decided on a policy and purchased it. Certain decisions and actions should be taken over the policyâs life, beginning with deciding who should be the policy owner and determining how to fund the premiums, and then monitoring the policy on an ongoing basis to ensure that it continues to perform as expected and meet your objectives.
You have several options when determining who should own the life insurance policy.
After deciding who will own the policy, the next administrative task is to determine which method of funding the premiums is most appropriate given your selection and circumstances. You may realize that a combination of strategies works best, which is not uncommon for many life insurance policyholders. To pay your premiums, one or more of the following techniques may be used.
Youâll need to make sure your premiums are paid on time to avoid losing your benefits. Additionally, trust-owned policies have unique administrative requirements that may need your ongoing attention.
Once your policy is in place, itâs important to review it periodically to make sure it still meets your objectives, especially if you experience a life-changing event such as marriage, divorce, or additions to your family. Itâs also a good idea to periodically review the financial strength of the insurance carrier for issues that may affect its long-term survival or ability to pay claims.
Since the complexities of insurance providers and life insurance policies can be vast, you may want to consult with a trusted financial advisor or insurance professional when selecting a policy and attending to administrative details. They can also help you monitor the policy and routinely reevaluate its features to make sure itâs appropriate for your personal circumstances and financial goals.