The importance of an annual insurance review

Comparing rates for major insurance products every few years can be beneficial.

Conducting an annual insurance review is even more important, though, especially as your responsibilities grow with more people and possessions.

Consider these tips to make the most of your yearly assessment.

•Create a one-page summary for each policy. Create a new document that includes a one-page summary of each policy you have with details like the type of policy, the carrier offering the coverage, the policy number, the date coverage was issued, current beneficiaries and individual and total policy limits.

•Assess new levels of risk. Using your one-page summary for each policy, assess whether the risk that a particular policy covers has increased over the past year. For example, the cost of building supplies has fluctuated over the past 5 years. If the current cost of building supplies and labor to replace your house are more than your homeowner’s policy limit, you should consider whether increasing your coverage makes sense.

•Review beneficiaries. Make sure you’re satisfied with the beneficiaries set up on each account and make any necessary changes that come about based on changes in your life. For example, divorce or death of a spouse is a common scenario where beneficiaries need to be updated on all insurance policies in a timely manner.

•Review your monthly premium payments. It’s easy to schedule and forget about your monthly payments. A long time could go by before noticing that your premiums went up by a little – or by a lot. Your annual review can be an opportunity to identify significant price increases so you can ask questions to understand why the increase happened and if you can do anything to prevent it from happening in the future.

•Call your agent with questions. Once you have assessed your current insurance coverage and updated beneficiaries, make sure to call your agent with any questions you have as well as your inquiries on additional coverages you might need.

One of my primary objectives is to help you achieve your financial goals through a holistic approach that is tax-efficient in my wealth management and tax resolution practice. For more information, visit www.fredtfoxiii.com.