Do you need to do a general review of your life insurance policy? If so, consider the following: Review your in-force illustration and policy’s contract, and make sure you understand its features (e.g., loan provisions, dividend options, etc.), riders (e.g., guaranteed insurability, waiver of premium, term conversion, etc.), growth assumptions (e.g., death benefit, cash value, etc.), liquidity (e.g., safe withdrawal amounts, etc.), and any other important factors. Consider the pros and cons of your life insurance, and determine whether it is still adequate for your financial situation. Check to see if the rating of your insurer has changed, and be sure to review other products in the marketplace before making any decisions (e.g., keep, surrender, sell, exchange, etc.). Do you need to review your options for surrendering, selling, or replacing your life insurance? If so, consider the following: If surrendering, review your policy’s surrender schedule, and be mindful of how much cash value you will receive relative to the total amount of premiums paid. Depending on your age/situation, you may be able to sell your life insurance policy (via life settlement) for an amount greater than your cash value, but be aware of the complexities (e.g., differing FMV estimates of policy, involvement of brokers and 3rd parties, etc.) that may arise. If replacing, consider utilizing a Section 1035 Exchange (or a partial exchange) for another life insurance policy, annuity, or for paying qualified LTC premiums. Be mindful of any specific actuarial assumptions (pre/post– Section 7702 changes, CSO Mortality Tables, etc.) that may be grandfathered into your policy, as well as how they may affect your policy (for better or worse). Have you been notified that your policy is at risk of lapsing? If so, consider ways you might rescue your policy (e.g., additional payments, paying off any loans, redirecting dividends, reducing death benefit, etc.), but be mindful of any potential negative effects on your cash flow and savings goals. GENERAL ISSUES YES NO Is your policy’s death benefit larger than what you currently need? If so, consider ways to lower your death benefit (e.g., reduced paid-up, request for death benefit decrease, switching from an increasing death benefit to a level death benefit, etc.). Is your policy’s death benefit smaller than what you currently need? If so, consider ways to increase your death benefit (e.g., using dividends to purchase paid-up additions, additional premium payments, increased death benefit via guaranteed insurability rider, etc.). Do you need to review your policy’s loan features? If so, consider ways you might leverage policy loans (e.g., income supplement, volatility buffer, alternative financing, etc.) to benefit your financial situation, but be mindful of interest rate factors (e.g., fixed, variable, rising rate environment, etc.) and any potential risks (e.g., lapse) that could impact your policy. Do you need to review how your cash value is growing? If so, consider the following: Review ways you might boost the growth of your cash value (e.g., electing dividends to purchase paid-up additions, reviewing investment sub-accounts/indexing allocations, etc.), and consider using the expected growth rate moving forward (rather than growth since inception) as a benchmark when assessing your cash value against other options (e.g., high-yield savings, CDs, bonds, equities, etc.). Be mindful of the guaranteed vs. non-guaranteed nature of your cash value growth, and consider other relevant factors (e.g., insurance company strength, policy dividend history, historical trends, etc.) that may give you insight into its expected performance. DEATH BENEFIT & CASH VALUE ISSUES YES NO
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