June 28 marks National Insurance Awareness Day—a timely checkpoint to review the cornerstone of many retirement and estate plans: life insurance. Whether you’re a pre-retiree preparing for your next chapter or already enjoying retirement, this day is a reminder to ensure your life insurance coverage still aligns with your current goals, lifestyle, and financial obligations.
Why Reviewing Life Insurance Matters in Retirement
Life insurance is often set up years—or decades—before retirement, when needs and responsibilities are vastly different. Back then, your priorities may have included:
- Replacing income for your family
- Covering a mortgage or other debts
- Ensuring college funding for children
But as your financial picture evolves, so too should your life insurance strategy. A personal coverage review can help determine whether your policy continues to provide value, or whether it’s time to adjust, repurpose, or even eliminate it.
Key Considerations for Your Life Insurance Review
Do You Still Need the Coverage?
If your children are now financially independent, your home is paid off, and you’ve accumulated sufficient retirement savings, the original reasons for holding a policy may no longer apply. But that doesn’t mean it has no value. Life insurance can still:
- Help offset estate taxes
- Leave a legacy to children or grandchildren
- Support charitable giving
- Provide liquidity to cover final expenses
What Type of Policy Do You Hold?
- Term Life: Often expires around retirement age. If your term policy is ending, consider whether converting to permanent coverage or exploring a new strategy makes sense.
- Permanent Life (Whole, Universal, etc.): These accumulate cash value, which can be borrowed against or used for retirement income in some cases. However, be mindful of premiums, especially if you are on a fixed income.
Is It Performing as Expected?
Request an in-force illustration to see projections of future benefits and cash value performance. You may be surprised at how interest rates or policy fees have impacted long-term outcomes.
Are Beneficiaries Current?
Life changes such as divorce, remarriage, or loss of a loved one are common in retirement years. Ensure your designations still reflect your wishes and are coordinated with your estate plan.
Life Insurance as Part of Your Broader Financial Strategy
According to the 2024 LIMRA and Life Happens Insurance Barometer Study, 41% of Americans feel underinsured, and nearly one-third wish they had bought more coverage earlier. Yet, many retirees forget to re-evaluate whether their current policies are still working in their favor.
- Consider if a life settlement might make sense—selling your policy for a lump sum.
- Review whether premiums are straining your budget, and explore options like converting to a paid-up policy with no future premiums.
- Coordinate your policy with your estate and tax planning, especially if you’re facing estate tax exposure or considering charitable bequests.
Final Thoughts: Take Action This June 28
National Insurance Awareness Day is more than a date on the calendar—it’s a call to ensure that your insurance continues to serve its intended purpose. Don’t let outdated coverage derail your retirement confidence.
At SFA Wealth, we take a personalized approach to retirement and legacy planning, ensuring your insurance aligns with your goals and financial health. Schedule your life insurance review today at sfawealth.com and let’s make sure your policy is still working for you, not the other way around.