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When Did You Last Review Your Insurance?

Most people refinance their mortgage to get a better deal and if their bank is having trouble, they switch to a more financially sound and better performing bank. But how do you evaluate insurance carriers and their performance? Chances are, your life has changed since you last purchased life insurance. The insurance industry has undergone dramatic changes, and interest rates have plummeted. If you haven't taken a good look at your life insurance policies lately, you might be missing out on essential information about the performance of your policies and possible gains resulting from more current, cost-effective coverage. A Policy Review is a critical component of a sound financial planning strategy. 

Why Review Your Insurance Regularly

What is a Policy Review?

The objective of a Policy Review is to ensure that your life insurance coverage is in alignment with your current financial needs. Due to significant changes within the life insurance industry in recent years, this is a good time to review your life insurance policies to ensure that you are getting the most benefit possible out of your life insurance coverage and that you have the right type of life insurance to meet your specific needs.

Over the past decade, life insurance products have advanced considerably. A Policy Review ensures that your life insurance policy meets your needs today. We can provide you with a thorough explanation of how your policy has performed, projected cash values at designated intervals, and an assessment about the number of years that the policy will remain in force based on current assumptions. In cases where there is a clear advantage, we will also provide you with information on alternative policies.

What Factors Into the Evaluation?

Your Current Situation

  • Have there been significant changes in your family life?
  • Have you gotten married, divorced, or added another member to your family?
  • Do you now have grandchildren who you would like to provide for?
  • Has there been a change in your employer-sponsored benefits?
  • Has your net worth increased or decreased significantly?
  • Are you planning to fund a child's college education?
  • Is your retirement plan adequate to fund your future?

The Status of Your Coverage and Your Carriers

  • Are your policies performing as projected?
  • Have there been changes in the rating of your life insurance policy's carrier?
  • Are there newer insurance products that are more cost efficient or that offer better guarantees?
  • Could you benefit from new riders* that offer more appropriate features such as return of premium or guaranteed death benefit protection?
  • Does term insurance coverage meet your needs?
  • Is your policy’s premium scheduled for a significant jump?

Why Would I Exchange an Old Policy for a New Policy?

Lower costs. In many cases, newer policies have lower cost structures than policies issued as recently as two or three years ago.

Carriers' financial status. If the financial stability of a carrier changes, it's often advisable to switch to a financially sound company.

Health changes. Improvements in health that affect the underlying policy cost.

Underwriting issues. New underwriting programs could reduce a policy's mortality costs or eliminate undesirable ratings.

*Riders are additional guarantee options that are available to an annuity or life insurance contract holder. While some riders are part of an existing contract, many others may carry additional fees, charges and restrictions, and the policyholder should review their contract carefully before purchasing. Guarantees are based on the claims paying ability of the issuing insurance company.

Annuity arbitrage

Do you have underperforming assets in your portfolio or assets that are not generating enough income to meet your retirement income needs?

There is a way to reposition underperforming assets to increase current income and create a larger financial legacy for your family.

We can reposition underperforming assets into a single premium immediate annuity (SPIA). The after-tax SPIA payments, which include a return of initial deposit, continue for life and often exceed the after-tax income from the repositioned asset. All or part of the excess after-tax SPIA income can be directed toward the purchase of a life insurance death benefit, which, if properly structured, passes income tax and estate tax-free.

How is this possible?

We take advantage of differences in the underwriting ratings of different insurance carriers for the same person. We purchase a SPIA from the carrier offering the less favorable insurance rating and, at the same time, acquire (in an irrevocable life insurance trust (ILIT) a life insurance policy from the carrier offering preferred rates.

How it works.

You convert and/or liquidate certain underperforming assets into a SPIA with a life-only annuity option(1). By doing so, you can generate a guaranteed income stream that can be used to meet current lifestyle needs(2).

Any income in excess of the amount needed for your lifestyle needs can fund annual gifts of premiums to the trustee of an ILIT(3). The trustee of the ILIT can then leverage these annual gifts by purchasing a life insurance death benefit, which, if properly structured, passes tax-free to your beneficiaries. If covered by your annual gift tax exclusion and/or lifetime gift tax exemption, the annual gifts of premiums made to the ILIT will not be subject to gift tax.

Moreover, since a life-only annuity option is utilized in this approach, the SPIA principal has been removed from your estate and will not be subject to transfer taxes at death. By incorporating a SPIA and life insurance into wealth transfer planning this way, you may be able to increase personal income and pass more wealth on to your beneficiaries than you would if the assets were retained until your death.

Roth IRA Rescue

Roth IRA Rescue

Looking for a cutting-edge alternative strategy for wealth transfer? Concerned about taxes on your IRA distributions? Concerned about the risk associated with the stock market? Want to leave as much money as you can to your family? Consider this Roth IRA Rescue service.

Under the IRA Rescue, you use IRA distributions to purchase a high grade individual universal life insurance policy. The death benefit and retirement income are tax-free. Loans from the insurance are used to pay taxes on the insurance premium.

Give Dugan & Lopatka a call to learn more.

Supplemental Indexed Retirement Program (SIRP)

Supplemental Indexed Retirement Program (SIRP)

You may be surprised to learn that life insurance can provide you with an economic value and return on investment that is competitive with the customary products purchased in the stock markets and with other financial institutions. We are excited to bring you a product that has all the benefits of acquiring the upside of the stock market but eliminates the downside of losing your investment due to negative returns in that same market.

The policy we provide invests in the S & P 500 index or such indexes as the Dow Jones, Russell 2000, Euro STOXX50 & the Lehman Aggregate Bond Index.

The SIRP provides all the upside of the market indexes but also provides a guarantee floor of 2%, a participation rate of 100% of the S & P 500 index with an annual cap rate of 14%.

What are the Benefits of a SIRP?

  • Tax-deferred growth
  • Tax-free income and withdrawls
  • Self completing at death (i.e. Death Benefit)
  • Creditor proof
  • Guarantees no "negative" returns due to market risk - a Guarantee investment floor of 2%
  • Captures upside returns with a "Participation Rate" of 100% with an annual cap of 14%

Is this Right for You?

Who is a good a good candidate for a SIRP?

  • Successful individuals interested in protecting their wealth for their children with life insurance
  • Highly compensated individuals, looking to maximize retirement income on a tax-free basis
  • People ages 35-68
  • Individuals interested in diversifying their investment base by placing life insurance as an investment class in their portfolio.
  • Entrepreneurs who need or want life insurance to protect their business, estate, buy-sell funding needs, insuring key people, or who have children and spouses from previous marriages.

Estate Planning

Estate & Retirement Planning

In the area of retirement planning or estate planning, insurance can play an important role in achieving your desired objectives. The advice of a good insurance advisor, especially one that understands income, gift, estate and other forms of taxes can greatly add value to your current estate and retirement efforts.

Life Insurance

Life Insurance

Life insurance helps to ensure that your family and loved ones are protected against financial difficulties in the event of a premature death. Combined with investments, retirement and estate planning, life insurance is a fundamental part of a sound financial plan.

Life insurance is also a valuable tool to fund other important financial techniques such as buy/sell agreements.

Dugan & Lopatka can offer some of the best coverage at very competitive prices. We have access to over 175 different companies which offer both term and cash value insurance.

Long-term Care Insurance

Long-Term Care Insurance

It is hard to envision yourself needing physical help in the future. According to the New England Journal of Medicine, 43% of all Americans will need to spend some time in a nursing home in their lifetime. The cost of long-term care can be enormous. Long-term care insurance helps ensure that your family is protected against this threat to your financial security.

Whether you need life, disability, or long-term care insurance, Dugan & Lopatka can provide you with coverage at competitive prices.

Disability Insurance

Disability Insurance

Becoming disabled due to an injury, accident, or illness can mean a significant loss of income. Disability insurance is a special type of health insurance designed to provide you and your family with income to cover living expenses that continue dispite the disability.

Whether you need life, disability, or long-term care insurance, Dugan & Lopatka can provide you with the best coverage at competitive prices.


If you would like to know more about how we can help you, please complete the Contact Us form or call us at (630) 665-4440.

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Dugan & Lopatka, CPAs, PC, 104 E. Roosevelt Road, Wheaton, Illinois 60187 -MAP- T: (630) 665-4440 Fax: (630) 665-5030