Work out what the policy needs to fund
For a working household, income replacement may be the largest need. Include the value of unpaid care and household work too: a family may need to pay for help after the death of a parent who does not earn a salary.
- Income and care costs to replace, and for how many years
- Debts, education costs, and final expenses
- Dependents who may need support beyond adulthood
- Existing policies, survivor income, and assets available for these purposes
- Business commitments that belong in a separate ownership or key-person analysis
Avoid counting the same dollars twice. For example, a model that pays off the mortgage may no longer need to replace the income used for that mortgage payment. Record the assumptions so the advisor can revisit them when the household changes.
Choose a duration that matches the need
Term insurance covers a stated period and generally has lower initial premiums than permanent coverage for the same applicant and death benefit. It generally does not build cash value. Compare the guaranteed premium period, renewal terms, and the point at which the family expects to rely on accumulated assets.
A conversion option may preserve a path to an eligible permanent policy without new evidence of insurability. The deadline can precede the end of the level term. Check the actual provision, available products, and pricing basis before relying on it.
Evaluate continuing needs separately
Whole life and universal life may address a continuing obligation, including support for a dependent, estate liquidity, or some business arrangements. Coordinate the purpose and ownership with the client's legal and tax professionals.
Compare guaranteed values with illustrated assumptions, required premiums, surrender charges, and the conditions needed to keep coverage in force. A policy described as permanent can still lapse if its funding or other requirements are not met.
Check employer coverage and existing policies
Read the employer plan's actual benefit amount and any portability or conversion rights. Coverage tied to employment may change or end with the job; do not assume either that it is sufficient or that it can never continue.
For an existing individual policy, check beneficiaries, remaining term, conversion deadlines, loans, and current performance where relevant. Review the consequences of replacement before canceling coverage, and confirm any new policy is in force first.
Bring these records to a review
The advisor's coverage analysis, current policy details, employer benefits, and relevant business agreements give Caleb a useful starting point. The review may support keeping the existing policy.
