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Urging consumers to review life insurance and annuities is important for life insurers and policyholders

Life Insurance and Annuities
by Mark Birdsall
Life settlements could help consumers going forward
Life settlements could help consumers going forward

While there has been a lot of talk in the last few years about the ways in which insurers could boost the number of people who are signed up for life insurance or annuities to prepare for the future, many Americans already have such policies and can increase their value to them by periodic reviews. Life insurers communicate with many of their clients regularly, and that should include a (hopefully) annual check to see whether those policies are properly aligned with their current financial situations.

Experts in the industry generally recommend that life insurance and annuities should, like life itself, really be a fluid thing, according to a report from CBS 3 in Philadelphia. That's because people's life circumstances change all the time, with corresponding changes to their financial needs. For instance, if each member of a couple buys life insurance after they get married, then that may fit their needs well when it's just the two of them. But what happens when they have a child together? It would make sense, at that point, to revisit each of their policies to ensure they are fully protecting their child and spouse financially in the event that an unforeseen tragedy strikes. Today's policies often provide policyholders with options to adjust coverages and funding levels as their goals and needs change.

When to do it
Reviewing a life insurance policy isn't actually all that hard, but it can take a little time that many consumers might not think they have, the report said. However, it is a vital part of reasonable financial planning for anyone with such coverage. So the question for many people might then become when they should do it. There are obviously many possible options, such as birthdays, January 1, or even National Insurance Awareness Day on June 28. Getting into this annual habit could help consumers update their financial plans regularly and take advantage of the options their coverage provides.

Consumers may regularly keep track of many aspects of their finances, so why wouldn't they do the same for life insurance?Consumers may regularly keep track of many aspects of their finances, so why wouldn't they do the same for life insurance?

Plagued by misconceptions?
Of course, these recommendations may go against what the majority of Americans believe to be true of their coverage, the report said. Ron Sussman, CEO of CPI Companies, a Voorhees, New Jersey-based accounting firm, told the station that surveys have found as much as 60 percent of Americans believe that a life insurance policy is basically "set it and forget it," which is to say that the particulars of their coverage when they sign up are what they're stuck with.

Those in the industry, of course, know that this isn't the case, the report said. And while it may not be a glamorous part of the job, the fact is that a big part of being a life insurance and annuity provider is educating people about any misconceptions they might have when it comes to their coverages.

That kind of outreach effort can help policyholders become more engaged in updating their plans and goals and using their coverages to help them achieve their objectives and protect their loved ones.

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