Your Old Insurance Policies
Recently I sat down with a 58 year old male executive to discuss his insurance policies. I was shocked to find out that he owned 16 life and disability insurance policies. The amount of money that he was paying in premiums each year was so large that it was harming his ability to properly save for retirement.
After we completed a proper insurance needs analysis that considers his net worth income, taxes, cash flows and goals, we both agreed that his need for insurance was far less than what he had been sold.
When asked how he came to own so many policies, he said it was over reliance on an agent who befriended him and just kept recommending he buy more and more and more.
What to do with old policies
Realize that you have 4 options to deal with old policies:
In the case of the 58 year old executive mentioned above, we are cancelling some of his old policies and changing others. At this stage of his life the money spent on premiums is better used on his retirement. His children are long gone, his retirement saving are strong and he simply doesn’t need all the coverage, nor the specific types of insurance he has.
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