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
- 1
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?
- 2
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?
6 more sections in the full guide.
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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.
Includes: “Are we still paying the originally scheduled premium?”
- Request an in-force illustration
An in-force illustration is a current projection from the carrier showing how the policy is expected to perform going forward based on today's values and current assumptions, rather than the assumptions used at purchase.
Includes: “Have we requested a current in-force illustration from the carrier?”
- Check for loans against the policy
Some permanent policies allow the owner to borrow against accumulated cash value, and unpaid loan balances plus accruing interest reduce both the death benefit and the cash value over time.
Includes: “Is there an outstanding loan against this policy?”
- Revisit ownership and beneficiary structure
Who owns a policy and who is named as beneficiary affects who controls it, who can make changes, and how proceeds are treated for tax and estate purposes.
Includes: “Who currently owns this policy, and who is the named beneficiary?”
- Consider the carrier behind the policy
Any death benefit or guarantee under a life insurance policy is subject to the claims-paying ability of the issuing insurance company, so it's reasonable to periodically check the carrier's financial strength ratings from independent ratings agencies.
Includes: “Do we know the current financial strength rating of our carrier?”
- Weigh the options if coverage no longer fits
If a review shows the policy no longer matches the need, options can include adjusting the death benefit, changing premium payments, surrendering the policy, or exchanging it for a different contract, each with its own costs, tax consequences, and loss of prior benefits.
Includes: “What would we gain and give up by changing this policy?”
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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.