When to Review Insurance Policies and Annuities

 When to Review Life, Disability, Long-Term Care Insurance, and Annuities  

Risk management is an important part of a good financial plan, and insurance helps you stay steady through both everyday disruptions and the less likely events that can affect a family in a much bigger way.

Many people put insurance coverage or annuity contracts in place for a good reason, then rarely revisit them. But if a policy is there to protect your income, your family, or your retirement plan, it deserves periodic attention.

The goal of an insurance and annuity review is not to keep shopping for something new. It is to make sure the coverage you have still supports the role it is supposed to play in your broader plan.

A simple review schedule

A common approach is to do a light review every year and a deeper review every few years, depending on individual circumstances. .

The annual check is a chance to confirm the basics. Is the policy or contract still in force? Are premiums, costs, or contract charges still manageable? Are beneficiaries current? Have there been any notices, riders, or updates that need attention?

The deeper review every few years is when you step back and assess the fit. Does the coverage or contract still make sense in the context of your plan? Is the amount still appropriate? Has anything changed in pricing, policy design, or availability that makes this protection worth revisiting? Does the carrier still have strong financial ratings as measured by independent rating agencies such as AM Best, Moody’s, or S&P?

This is one reason it helps to review insurance before there is urgency. You do not always need to make a change, but you do want to avoid letting important details drift.

What can change between reviews

Even when life feels steady, insurance and annuities can drift out of alignment. That usually happens in one of three ways:

• Your needs change: Income may rise, children may become independent, retirement may get closer, estate planning priorities may shift, or beneficiary designations may no longer reflect the people or goals the policy was meant to support.
• The policy or contract changes: Premiums can increase. A term policy can get closer to the end of its level premium period. An insurance company may send a notice, rider, or policy update that deserves review. An annuity may still be inside a surrender period. Over time, even a rider that once made sense may no longer fit the role the policy is meant to play.
• The insurance market changes: Pricing, availability, and policy design evolve over time. What is available today may look different than what was available when you first bought coverage. The financial strength of carriers can change as well, which is worth monitoring.

All of this is why a review can be helpful even when there is no obvious problem.

Life insurance: review the purpose, price, and fit

Life insurance reviews usually start with one question: What is this policy supposed to do?

For some families, the answer is income replacement. For others, it’s paying off debt, creating flexibility for a surviving spouse, supporting children, or helping with estate planning goals. Over time, that purpose can change even if the policy stays the same.

A review should confirm that the policy is active, the premium still makes sense, and the beneficiaries are correct. It should also ask whether the coverage amount still matches the reason the policy was purchased in the first place.

If the policy is term insurance, it is especially important to know where you are in the term period. In some cases, newer term pricing may be more attractive than it was when the policy was first purchased, which makes a comparison worth considering. That does not automatically mean replacing coverage is the right move, but it can be a good reason to take a closer look.

The point is not that newer is always better. The point is that life insurance should still match the planning needs it was meant to protect.

Disability insurance: review both coverage and timing

Disability insurance protects earning power, which makes it especially important during working years.

In many cases, the cost of waiting may involve more than just a higher premium. Disability insurance markets have tightened, which can mean fewer options or more restrictions than you might expect. If your health changes over time, or if you are injured in a way that affects your ability to do your job, waiting can also lead to tighter underwriting, more exclusions, or you may lose even your insurability.

A review should confirm whether the policy still protects enough income and whether the contract features are as strong as you think they are. If income has risen over time, the benefit may now cover less than originally intended.

Timing matters here. If you already have a strong policy, a review can confirm whether it still supports your plan the way you intended. If you do not have coverage, a review can help you decide whether now is a good time to apply rather than waiting.

Long-term care insurance: review the staying power of the policy

Long-term care insurance raises a different set of planning questions.

Here, the issue is often not whether the policy exists, but whether it still fits within the broader retirement plan. Is the premium still affordable? Do the benefits still make sense? Do the inflation features still support the role the policy is meant to play?

This is one of the clearest examples of why reviews matter when policy notices arrive. A premium increase or reduced-benefit option can turn a policy that once felt straightforward into a planning decision.

In many cases, the question is not whether the policy has value. It’s whether it still works well enough within the rest of the plan to justify keeping it in place.

Annuities: review the role, costs, and flexibility

Annuities are worth reviewing because they are long-term contracts with layers of cost and rules that can matter a great deal as circumstances change. Annuities can play a valuable role in certain situations, particularly where guaranteed income or risk transfer is a priority. The key is ensuring the structure aligns with the overall plan.

A review should look at whether the annuity is still serving its intended purpose, whether the benefits, riders, or rules built into the contract are worth what they cost, and whether there are surrender charges or liquidity limits that still matter. If an exchange is being considered, it’s especially important to understand whether that move would restart a surrender period or introduce new costs.

Carrier financial strength, as measured by independent rating agencies, matters here too. . An annuity is a long-term contract, and the insurance company behind it is part of what you are relying on.

Illustrative example (the free-look window can matter): In one example, a recent widow, Nancy, was approached by an insurance salesperson soon after her husband’s death and encouraged to place inherited retirement assets into a new annuity. The sales pitch leaned heavily on “guarantees,” but the paperwork revealed ongoing annuity charges, rider fees, and a new multi-year surrender schedule—meaning less flexibility and a longer lock-up right when she needed simplicity and liquidity.

Because the contract was reviewed immediately, Nancy was still inside the free-look period (free-look windows vary by state and contract and are often limited) ). In this situation, the contract was canceled within the applicable free-look period, allowing the premium to be returned and the assets to be repositioned consistent with the individual’s broader plan , while also avoiding the annuity’s ongoing charges, surrender penalties, and long-term lock-up.

Situations like this can highlight how compensation structures and incentives may differ across financial professionals. This is one reason many investors choose to have insurance and annuity contracts reviewed as part of a broader, fiduciary planning process.

A review does not always mean a change

Reviewing insurance and annuities is not about finding a reason to replace every policy.

Sometimes a review confirms that your current coverage is still doing exactly what it should. Other times, it highlights a gap, an outdated assumption, or a policy worth revisiting.

Either way, the value is clarity. A thoughtful review helps ensure this part of your risk management strategy continues to support the life you are building and the plan designed to protect it.

Insurance and annuity reviews are part of the wealth management work we do with clients. As fiduciaries, our compensation structure is designed to minimize conflicts, and we do not receive commissions for insurance recommendations.

If you’d like to discuss how this may apply to your situation, you can learn more about becoming a client . Our clients turn to us for advice on this and similar topics.

About the Author:

Stephen Ahern, CPA/PFS, CFP®, AEP®, MST, is President of Sachetta. He holds a Master’s Degree in Taxation from Bentley University and for over thirty-five years, has provided individual financial, investment, estate, and tax planning, as well as small business consulting, to a diverse base of clients. His clients have included key top-level executives, high-net-worth individuals, business owners, venture capitalists, and entrepreneurs. As an established personal financial planner, Stephen has delivered numerous presentations on financial, investment, retirement, and tax planning to corporations and professional groups. He has also written articles on investments, education, and estate planning. Before joining Sachetta, he co-founded and served as President of Wealth Management Advisors, LLC. 

Disclosure: The scenarios discussed are hypothetical and for illustrative purposes only. They do not represent actual clients or specific outcomes. Financial planning does not ensure a particular result but may help improve preparedness and decision-making. This content is for informational purposes and is not legal or tax advice.

 This material is for informational purposes only and should not be considered investment, tax, or insurance advice. Insurance and annuity decisions should be evaluated in the context of an individual’s specific financial situation. All guarantees are subject to the claims-paying ability of the issuing insurer.