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Can I Change My Life Insurance?

Secret’s out—life insurance is not a one-and-done deal. Contrary to popular belief, you can change your life insurance policy and your coverage amount throughout your life as your situation inevitably changes.

But why would you want to change your life insurance in the first place? What elements can you change? 

Let’s discuss.

Why Would I Change My Life Insurance?

There are many reasons why one might decide to change their life insurance coverage. Some policyholders might modify their life insurance to:

  • Reduce their premiums to an affordable amount
  • Find a policy with features better suited to meet their current needs
  • Update the amount of coverage

Additionally, there are various life events that might trigger changing one’s life insurance policy. These changes include, but are not limited to:

Changes in Career

This might include a career change, business ownership change, or the decision to launch a new company. 

Changes in Family Circumstances

Marriage, divorce, the arrival of new children or grandchildren, a family member’s death, and the need to care for one’s aging parents, are all reasons why one’s life insurance policy might need to be revisited.

Changes in Health

A policyholder might want to change their life insurance if the insured experiences a significant change in health, either positive or negative, or has a greater need for other features like living benefits.

Policy or Industry Changes

There can also be policy or industry changes that might prompt one to change their life insurance, such as updated mortality tables, and new product features and benefits. In addition, changes to tax laws – especially inheritance taxes – can increase or decrease the need for life insurance.

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What Can I Change About My Life Insurance?

So, we’ve addressed the fact that life insurance can be changed — but what about it can be changed?

As the policyholder, you are in control of the choices you make regarding your life insurance policy, whether it’s your life or someone else’s that is insured. This might include:

  • Buying additional life insurance coverage
  • Amending your life insurance policy with your current carrier
  • Canceling or selling your insurance policy and finding a policy better suited to your current needs
  • Withdrawing money from your plan

There are many reasons to both change, and not change, your existing policies. Some of these reasons include:

Reasons to Keep My Life Insurance

  • Competitive rates of return on dollars invested
  • Tax-favored characteristics and benefits 
  • Preservation of favorable health status
  • Changes in tax laws
  • Wait out surrender charge periods
  • Explore life settlement options

Reasons to Change My Life Insurance

  • Rising premiums
  • Outdated features and benefits
  • Unfavorable contract guarantees
  • Policy type is no longer aligned with current risk or need profile
  • Carrier quality concerns
  • Lack of underwriting upgrade programs

The bottom line? Life changes, and as it seems, life insurance policies are actually created with this fact in mind. The life insurance plan you structured 10 years ago isn’t irrevocable.

The Importance of Auditing Your Life Insurance Policy

Life insurance policy audits should be a part of your routine checklist. This includes taking a look at your existing policy’s premiums, death benefit, and guarantees as well as its current cash and surrender value.

But why do you need to audit existing plans? Improving an existing life insurance policy can mean:

  • Reducing risk;
  • Improving yields on premium dollars invested; and, 
  • Achieving peace of mind knowing that your affairs are in order. 

Part of our job at Acumen Insurance Solutions is to routinely audit our clients’ life insurance policies to ensure coverage continues to meet client needs. Get in touch today and read on to learn more about the importance of auditing your existing life insurance plan.

*Disclaimer: Life insurance policies are based on the claims-paying ability of the underlying insurance carrier and are not FDIC-insured. Pricing can be based on many factors, including the insured’s age, gender, health, and state of issue. Please refer to a current policy illustration for details.

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Collaborating with Acumen

Who we are

Acumen insurance solutions specializes in the strategic use of life insurance for estate planning, business succession planning, and owner/executive benefit planning for both u.s.–based and foreign national clients. We review existing policies and custom design new policies to meet client’s specific needs while collaborating, ensuring that any proposed coverage changes fit within the framework of the client’s overall plan. We strive to exceed expectations but not only offering sound advice, but also providing top-notch customer service.

Why collaborating works

As specialists in our respective fields, we work hard at providing our clients with the best possible service. However, our client’s needs often extend beyond the realm of the services we can offer them on our own. An accountant gives tax advice, an attorney gives legal advice, a financial planner gives investment advice, and an insurance professional designs insurance products. Rarely, is one professional able to offer a high quality one-stop shop for clients. This reality places us all in the position of having to defer to the expertise of our colleagues who are equipped to serve our clients in the ways we cannot. By teaming up with like-minded firms, we make our clients happier through collaborating and, consequently, watch our practices grow. Acumen insurance solutions continues to expand as a result of forming referral relationships with key players in other fields and we would enjoy having the opportunity to grow with you as well.


Business Succession Planning

Development and funding of shareholder buy-sell agreements and owner/key employee retirement benefit plans.

Estate Planning

Strategic design, implementation, and funding of wealth transfer plans that protect assets for heirs, reduce taxation, and often involve a charitable legacy.

Policy Analysis & Review (par)

Evaluation of existing life insurance contracts to determine competitiveness, value, and applicability of coverage to the overall plan.

Life Insurance Services

Policy design, carrier selection, underwriting, funding, positioning, and implementation.

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What is Bank-Owned Life Insurance (BOLI) and How Can You Benefit?

Bank Owned Life Insurance (BOLI) is an institutional financial product used by most U.S. banks the first policy was issued in 1983.

BOLI is used to provide benefits to key employees, retain top bank directors and executives, and protect against the loss of a critical employee, in addition to enhancing non-interest income.

The bank is the policy owner, premium payor, and beneficiary the insureds are consenting key executives.

Policies are placed with top-quality insurance carriers and funded on a single premium basis, with cash values growing income tax deferred and death benefits paid income tax-free. 1

Policies with similar characteristics can be used for organizations, families, and individuals to provide protection and enhance current balance sheets.

Who Owns Boli?

Did you know that many commercial banks have more invested in life insurance policies than they do in bank premises, fixed assets and all other real estate assets combined?

As of the third quarter of 2019, nearly 3,800 banks owned $190 billion in BOLI policies. For example, Bank of America owns $22 billion, JP Morgan Chase owns $11 billion, and Wells Fargo owns $18 billion in BOLI assets2.

BOLI is highly regulated by various federal and state banking authorities Regulations allow banks to hold up to 25% of their most vital regulatory capital known as Tier 1 in BOLI policies .3

What is the Purpose of BOLI?

Even though BOLI can be a very attractive place for banks to earn higher current yields on their safest capital, these policies are not purchased for the sole purpose of enhancing non-interest income.

Rather, BOLI is used as a tax-favored asset to increase bank earnings and offset rapidly rising costs of employee benefits, such as sky-rocketing medical, disability, and workers’ comp insurance premiums.

BOLI is also used to protect (indemnify) the bank from the unexpected loss of skilled and valuable executives, often referred to as “key person” life insurance.

Banks also utilize BOLI as a vehicle to finance the cost of providing a deferred compensation plan for key officers.

Download the guide to Bank Owned Life Insurance here:

How is BOLI Funded?

BOLI is institutionally-priced, permanent life insurance, funded with a single, lump-sum premium.

The premium equals the cash surrender immediately. BOLI products have no-loads, nosurrender charges, and all the income.

How Does BOLI Enhance a Bank’s Balance Sheet?

One of the biggest ancillary benefits is that BOLI policies produce far superior returns than traditional bank investments, such as municipal bonds, 5- and 10-year U.S. Treasurys, and mortgage-backed securities (refer to Chart A).

BOLI generates non-taxable profit and loss earnings equal to the growth in cash surrender value, and any death benefits are paid out are completely tax-free.

In fact, the tax advantages enjoyed by using BOLI are usually absent in other nonqualified retirement packages and benefit plans, which is what makes BOLI such a valuable component of a general deferred compensation program.

To emphasize earnings, BOLI policies are structured to maximize the cash value growth and minimize the expense of the death benefit portion of policy.

BOLI is issued by highly-rated insurance companies, which means that the chance for default, bankruptcy, or other negative situations is remote.

In fact, banks and their regulators are comfortable using life insurance companies to protect their safest capital because they do not use excessive leverage.

For example, if a bank has $1 on deposit, it can lend out up to $10 to borrowers. This leverage can lead to instability and, in excess, bank failure or a “run” on the bank where it cannot meet depositor demand.

However, if a life insurance company has the same $1 on deposit, it may loan out no more than $0.92, and usually only a fraction of that amount, which makes them stable institutions in down economies and a good fit for a portion of banks’ safest capital.

Who is BOLI Policy Owner, Insured, and Beneficiary?

The bank is the owner and beneficiary of the policies. When the insured employee passes away this tax-free death benefit can be used to fill the vacuum left by the death of the key executive, as well as fund other business needs.

Banks typically keep the life insurance policies on retired or separated executives because the rate of return can be even higher when the policies are held until death.

A portion of the death benefit may be shared with insured officers via a supplemental life insurance plan which can serve as a valuable “Golden Handcuff.”

Depending on the insurance companies and amount of premium, if 10 or more executives participate, then in most cases no medical tests are required.

Can Individuals Benefit From BOLI?

Life insurance companies only issue institutionally priced BOLI policies to commercial banks.

However, some carriers allow selected agents to design retail policies with loads and fee structures that are like BOLI. These policies are used to protect families against the loss of breadwinners and to protect businesses, including nonprofits, against the loss of owners and key employees.

Just like BOLI, these policies also generate higher current yields on cash value compared to those offered by other safe, liquid assets, such as CDs, U.S. Treasurys, and bonds (refer to Chart B).

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How to Get Elite Status on Business Flights

There are a few simple ways to greatly improve your next business trip, and one is gaining elite status.

If you want to get the most out of your business trips, elite status perks significantly improve your traveling experience and, consequently, your productivity. While perks vary from airline to airline, they often include a faster line to your security checkpoint, complimentary access to airport lounges, priority boarding and more comfortable seating. You can also save money with free checked bags, in-flight Wi-Fi and meals.

How can you score those coveted elite status perks? You have a few options available.

Earn It
the Old Fashioned Way.


Flying enough with one airline to reach an elite status tier is the simple way. If you’re traveling weekly or going on cross-country trips often, this method actually isn’t that difficult. For example, you could reach American Airline’s Platinum tier by traveling 50,000 miles or 60 segments annually.

Taking a status challenge accelerates the process. You pay a small fee to the airline, and then you can earn your way into elite status tiers by traveling a certain mile minimum within the challenge period. American Airlines charges a $200 fee to challenge for its Platinum tier, and you then have 90 days to travel at least 12,500 miles.

The problem with this method is that booking all those flights gets expensive, especially considering you only earn elite-qualifying miles (EQMs) when you pay with cash, not reward points or frequent flyer miles. Shooting for those elite status tiers may be worth it if you travel often or have a few trips coming up and can take a status challenge. Otherwise, it’s not the best option from a value perspective.