Today is National Insurance Awareness Day. I had no idea such a day existed until I was researching topics for today’s message. Evidently, every day is a national something day and usually more than one thing. Today is also National Paul Bunyan Day, while yesterday was National Sunglasses Day, National Orange Blossom Day, and National PTSD Awareness Day.
Ostensibly, National Insurance Awareness Day was created as a day to review your insurance coverage. But how effective can that be when, I’m guessing, at least 95% of insurance agents, let alone the masses, don’t even know about it?
That’s not to say it isn’t a good idea, because it is. Anything that can get people to sit down and review their coverage can’t be bad. I’m just not sold on how effective this marketing ploy is at accomplishing that.
One of the reasons people shun reviews is that they think that the agent is just doing it to sell more coverage. Admittedly, the suggestion for more coverage is often an outcome of a review, if only because most people are underinsured. A review will obviously highlight that fact.
But another potential outcome of a review is a reduction in premium. This can be because lower premium alternative exists to the current plan. Policies with the same face amount are not all priced the same. For example, I just ran a quote for a 40-year old male for $1,000,000 of 20-year term at the best underwriting class and the program returned 25 policies with annual premiums ranging from $614 to $1,120.
Additionally, if you’ve stopped smoking, lowered your cholesterol and/or blood pressure, or lost weight since you procured the policy, you could be eligible for a premium reduction.
Another benefit of a policy review is ensuring that the current beneficiary designations are appropriate. With divorce as common as it is, this has the potential to create havoc – and lawsuits! While life insurance is usually a part of the divorce case, sometimes older policies, especially those that require no out of pocket premiums, can slip through the cracks.
What would happen if the primary beneficiary was never changed from the ex-spouse? I’m not an attorney, so I can’t definitively answer that question, but it’s conceivable that it depends on state law. What about if the insured dies after surviving both spouses and there are children from both marriages that are not named as beneficiaries? Again, I don’t know, but I do know that a policy review would have made the question an academic one.
So to “celebrate” National Insurance Awareness Day, schedule a policy review if you haven’t done so in a while. There is much potential good to come from it, while the only downside I can see is that you may be taking bread out of an attorney’s mouth. :)