Reviewing an Existing Life Insurance Policy
A way to check whether a policy purchased years ago still does what it was meant to do.
Policyholders who bought life insurance some years ago and want to understand whether the coverage still matches their current needs.
Life insurance policies are frequently purchased once for a reason that made sense at the time, then left unexamined for years while circumstances quietly change.
- How to identify the type of policy you hold
- How to check whether the original need still exists
- How to check premium and funding status on a permanent policy
- What an in-force illustration is and why to request one
- How to check for loans against the policy
- Why ownership and beneficiary structure deserve a fresh look
- Carrier and claims-paying considerations
- What options exist if the coverage no longer fits
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Identify the type of policy you hold
Term policies provide coverage for a set number of years with no cash value, while permanent policies such as whole life, universal life, or variable universal life combine coverage with a cash value component and different funding mechanics. The policy's schedule page or a call to the carrier will confirm the type. The type determines nearly every other question that follows in this review.
Questions to answer- · Is our policy term or permanent, and for how long is it in force?
- · Does it build cash value, and if so, how is that value calculated?
- · When does term coverage, if any, expire?
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Check whether the original need still exists
Life insurance is usually purchased to replace income, cover a mortgage, fund education, or provide liquidity for an estate — needs that can shrink, grow, or disappear entirely over time. Compare the coverage amount to what the need actually looks like today, not to what it was when the policy was purchased. A policy that made sense a decade ago may now be too large, too small, or unnecessary altogether.
Questions to answer- · What was this policy originally meant to cover?
- · Does that need still exist today, in the same form?
- · Has the coverage amount kept pace with the need, or fallen behind it?
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Check premium and funding status on a permanent policy
Permanent policies can be underfunded relative to the assumptions used when they were sold, particularly if interest crediting or dividends have run lower than originally illustrated. Underfunding can eventually cause a policy to lapse earlier than expected unless additional premium is paid. Ask the carrier directly whether the policy is on track to perform as intended given its current funding level.
Questions to answer- · Are we still paying the originally scheduled premium?
- · Has the carrier indicated the policy is under- or over-funded?
- · What happens to this policy if funding continues at its current level?
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- Identify the type of policy you hold
- Check whether the original need still exists
- Check premium and funding status on a permanent policy
- Request an in-force illustration
- Check for loans against the policy
- Revisit ownership and beneficiary structure
- Consider the carrier behind the policy
- Weigh the options if coverage no longer fits
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Official sources
Rules change. Confirm anything that affects a decision against the current official source.
Where this fits in our work
This guide accompanies our estate & legacy planning work. Joe Donti meets with Arizona households by appointment — in the Scottsdale office, by phone, or on Zoom.
Related reading
This guide is general education and is not individualized investment, tax, legal, Medicare, or insurance advice, and it is not a recommendation to buy or sell any product or security. Investing involves risk, including possible loss of principal. Insurance and annuity guarantees depend on the claims-paying ability of the issuing carrier. Rules and figures change — confirm current details with the official sources above and with your own tax, legal, or insurance professional.