Life Insurance Policy Review

Life Insurance Policy Reviews: Don't Let Your Clients Policies Fail Before They Do

Life insurance may well be one of the largest assets in your client’s estate, and there may also be policies on the client’s life owned outside of the estate, such as in a trust or by a corporation. Generally, it is an asset that is not evaluated, reviewed, or analyzed on a consistent and comprehensive basis.

That being said, the life insurance industry has undergone a transformation in the past decade. Currently, lower morality charges and other cost efficiencies have created new life insurance products that may provide a greater value to the consumer.

Use a life insurance policy review to make sure your clients policies are there when they need them.

A huge opportunity for you and your clients.

Conducting a life insurance policy review represents a great opportunity to visit with your clients. In addition to the numerous changes in our industry, interest rates have been historically low and the equity markets have preformed below their historic norms.

With all the changes just mentioned, your clients’ permanent life insurance coverage should be reviewed to make sure the policy(ies) are performing in a cost-efficient manner and have remained consistent in helping your clients achieve their overall planning goals and objectives.

Who is most in need of a life insurance policy review?

There are several life changing events that suggest a policy review should be conducted. These include:

Family changes, such as marriage, divorce, birth of a child, etc.
A change in jobs or benefits
The recent purchase of a new home and mortgage
The purchase of a business, or a change in business value
The need to protect a child’s education funding
A recent need to care for elderly parents
Improved health and lifestyle changes
Interest (UL), dividends (permanent whole life), or investment returns (VUL) may have declined
Loans, withdrawals, or other policy changes that may affect policy performance
Premiums that may not have been paid as planned
Premiums on term insurance that have increased with age, making conversion to or purchase of a permanent policy more expensive if the insurance need continues

Who are ideal clients for a policy review?

All clients should have their life insurance coverage reviewed every three to five years. In addition, many of your clients may fall into categories that warrant additional review including:

Younger Clients– who purchased term insurance some time ago rather than a permanent policy, but have a long-term life insurance need.
Middle-Aged Clients– who purchased insurance for family protection, but may now be paying more than necessary. Those who are holding term or group term coverage that might put their families at risk or those not utilizing life insurance that builds cash value as efficiently as other policies might.
Business Owners – who are utilizing life insurance to handle their continuation plans, benefit plans, or key person coverage.
Trustees – who can place themselves at legal risk, and their client’s goals and beneficiaries needs at risk, by not diligently monitoring their life insurance.

A turn-key solution to life insurance policy reviews.

A proper policy review requires policyholder authorizations, inforce illustrations, an underwriting assessment, policy and beneficiary analysis, comparison to currently available alternatives, and more. Partner with Provada for our turn-key solution and make this invaluable service available to your clients.