Life insurance plays an important role in the completion of your client’s financial plans.  Whether it’s to protect their family, fund an estate tax bill, or complete a benefit plan; life insurance is often a necessity in reaching your client’s financial objective. As a financial professional one of the commitments a you make to clients is to monitor the client’s life insurance needs and existing coverage over time. Conducting a Personal Policy Review Analysis once every three to five years is a critical part of that ongoing obligation to make sure your client’s life insurance policy(ies) are keeping pace with their ever-changing needs.

What does a Personal Policy Review Analysis consist of?

A life insurance review consists of two main elements: (1) a review of the client’s current life insurance needs, followed by (2) an analysis of the clients existing life insurance coverage to determine if the death benefit coverage and the type of policy is still appropriate.

The Benefit of conducting a Personal Policy Review Analysis

Conducting a Personal Policy Review represents a great opportunity to further your client advisor relationship; building trust; uncover the need for additional life insurance on the client and or close friend or family member; and create a window for referrals.

EIGHT EASY STEPS TO REVIEWING YOUR CLIENT’S POLICIES:  

1. Determine whom you will contact. In other words, who should receive a review?

All of your clients should receive a periodic life insurance needs analysis and evaluation of their existing policies. We recommend that this service be provided at least once every three to five years.  When you don’t know where to start, skim through your book of business and look for policies that have the following in common: Existing UL, Whole Life, and Term Policies with face amounts of $500,000 plus; Policy owners over the age of 50;  Policies that are at least 5 years old; Existing premiums of $10,000 plus; Policies with cash surrender values of $10,000 plus

· A Life Insurance Quick Needs Estimator is a helpful for determining if the policyowners’ needs have changed:

· Has their need for insurance changed

· Have they recently been married or divorced?

· Has a death occurred?

· Has their health status changed?

· Has there been substantial policy activity such as loans, withdrawals, or death benefit changes?

· Has their policy been in trusts, and in dire need of a review?

· Has the policy(ies)been issued by an insurer(s) that has had a drop in ratings?

2. Send out a Pre-Approach Letter(s) with information explaining why it is important for your client to have their policy(ies) reviewed once every three to five years.

3. Perform a complete Client Policy Summary to determine whether or not your clients current policy(ies) is keeping pace with their current and future needs. Remember to use a separate form for each of your client’s policies.

4. Request complete inforce illustration(s) from the carrier(s), regarding all of your client’s existing policies.

For the purpose of requesting information from the carrier, you may need authorization from the client if you have not previously obtained one.

5. Conduct a Current Policy Performance Assessment. This assessment should Review ALL of your client’s existing policies to ensure that the policy(ies) are contributing effectively to the client’s overall insurance plan.

6. Prepare a review to present to the client that includes:

• Inforce ledgers
• The Current Policy Performance Assessment
• Your conclusions and recommendations.

7. Prepare a Policy Comparative Analysis Chart. This chart should compare the inforce policy against the best alternative policies.

8. Help your client make the right decision.

Provada has created a turnkey package for advisors to offer policy reviews to their clients. More details can be found at http://www.provada.com/solutions/policy_review.php and sample documents can be found at http://www.provada.com/tools/policy_review.php (registration required).