Policy Review – Part Two

By Shayne F.

Last week, Allison provided some great reasons to conduct a policy review and some great questions to ask. Since some of our largest cases are written every year as a result of policy reviews, I wanted to provide some additional information.

Meeting with your clients and asking questions about their clients existing insurance, you can help to assess what is important to them today that may not have been included in their old contract. As an example, circumstances may have changed in their life and they may now need to further discuss Long Term Care, Critical Illness, Disability or even Unemployment Riders.

When you’re meeting with new clients, reviewing their current coverage is critical, especially considering their insurance agent that sold the policy could be out of the business.  Policy review also puts you in positive position to gain referrals and be looked at as a professional resource and you can have the opportunity to obtain additional revenue.

Things to consider while conducting your policy review:

  • There continues to be a number of interest sensitive UL policies that were written in the 80’s and 90’s that will lapse prematurely without a higher level of funding or a reduction in the client’s face amount.
  • Variable UL is also a policy that was illustrated with inappropriate crediting and funding patterns.  Those can be enhanced by performing a 1035 exchange to a guaranteed UL or to an IUL where in either case, the policy would have some new protection in place to keep the death benefit in force to maturity or have cash values growing with downside protection.
  • Clients that are now uninsurable should have old policies reviewed to see if term policies can be converted so that coverage will be in force when needed or if by funding with more premium, keep existing permanent insurance in-force.
  • Clients that have old Whole Life policies many times lack leverage between current cash values and death benefits.  Quite often, they can purchase more coverage without having to pay any more premium.

While January is the time of year it “makes most sense” to conduct a policy review, you know your current clients best. Touching base with them on a regular basis (especially when you know major life events are happening) throughout the year will allow you to stay on top of their coverage needs. If you need ideas to help your clients with their needs, please do not hesitate to call us.

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