As a law partner or a self-employed lawyer, your life insurance is not just a policy—it's a cornerstone of your financial strategy. Regularly reviewing your life insurance ensures it aligns with your evolving career, family needs, and financial goals. 

This article explores the important aspects you should consider to ensure your coverage is adequate and appropriate. Be sure to contact us at Hark Financial Planning if you’d like a personalized consultation about your coverage. 

Changes in Financial Obligations 

Your financial responsibilities may have grown or shifted significantly since you last assessed your life insurance. Consider factors such as: 

• Increased liabilities: Have you taken on larger financial commitments like a new home mortgage or business loans? 

• Family changes: Events like marriage, the birth of a child, or a child entering college can substantially increase your financial responsibilities. 

• Business dynamics: For partners in law firms, changes in the firm’s structure or profitability might affect your financial standing. 

Revisiting your life insurance in light of these changes is vital to ensure it still meets your evolving needs, providing the necessary security for your financial and personal transitions. 

Coverage Adequacy 

Is your current life insurance sufficient to cover all your needs without leaving your loved ones or business partners financially strained? 

• Debt and income replacement: Ensure your policy covers outstanding debts and provides income replacement for your dependents. 

• Estate taxes: Particularly for those with significant assets, ensuring enough coverage to handle potential estate taxes is crucial to avoid liquidating other assets. 

It’s important to reassess your coverage periodically to ensure it matches your current financial landscape, thus safeguarding your family's future and your financial legacy against unforeseen challenges. 

Policy Type and Features 

Assessing the type of life insurance policy you hold and its features is essential as your financial and personal circumstances evolve over time. 

• Term vs. Permanent: While term life insurance might have been suitable initially, perhaps now a permanent life insurance policy is more appropriate to accumulate cash value or provide lifelong coverage. 

• Adjustable benefits: Some policies allow you to adjust your death benefit as your needs change, which can be crucial for adapting to new circumstances without purchasing a new policy. 

Regularly reviewing the type and features of your life insurance ensures that your coverage remains aligned with your long-term financial goals and family needs, providing peace of mind as your life evolves. 

Premiums and Performance 

Understanding the cost-effectiveness of your life insurance and evaluating the performance of any investment components are crucial for ensuring financial efficiency. 

• Cost-effectiveness: Have premiums changed? Are they likely to increase? 

• Investment component: If you have a whole or universal life policy, how well is the cash value performing? Could these funds be better utilized elsewhere? 

Stay proactive about monitoring your life insurance premiums and the performance of associated investments to ensure that your policy continues to offer the best value for your financial strategy 

Health and Lifestyle Changes 

Changes in your health and lifestyle can significantly impact both the cost and adequacy of your life insurance coverage. 

• Improved health: You might qualify for better rates if your health has improved or you’ve stopped smoking. 

• Risky activities: Engaging in new activities deemed risky by insurers (like flying planes or rock climbing) could affect your premiums or coverage needs. 

Keep your insurer updated on any significant health improvements or lifestyle changes to ensure your life insurance coverage is adjusted appropriately, potentially lowering your costs or enhancing your benefits. 

Preparing for the Future 

Reviewing your life insurance is more than a financial checkup; it's about ensuring your peace of mind and securing your legacy. As your life and laws change, so too should your approach to coverage. Partners and self-employed lawyers face unique challenges and opportunities in managing their life insurance, and staying proactive is key. 

For tailored advice that considers your specific professional and personal context, consider booking a consultation with Hark Financial Planning who understands the complexities of professionals in legal careers.