LIFE INSURANCE REVIEW

Know your client, protect their financial future

Most clients treat life insurance as a “one-and-done” product instead of the dynamic financial vehicle it really is and the life insurance review will help your clients increase the likelihood of financial success for themselves and their families.

Life Insurance plays an important role in the attainment of your client’s financial plans. Whether it is to protect their family, fund a tax liability, complete a benefit plan, or more, life insurance is often central to helping your client meet their objectives. But is your client’s life insurance correct for their situation? Performing as expected?

Why “Life Insurance Review”?

If change is considered a constant, for both your clients and the financial services industry, it is important to constantly monitor. If your clients’ financial situation has changed, has their insurance kept up? Market volatility has led to substantial change in the insurance industry; how has that impacted any existing insurance your clients have?

Interest rates have declined and remained low for an extended period of time. However, people are also living longer. For many years insurance companies offered policies offering lower premiums if interest rates remained high; without proper due diligence, clients with these policies may find out too late that their policy will lapse unless they pay significantly higher premiums. Also, generally speaking, older policies have built-in costs based on older mortality data whereas newer policies take into account longer lifespans. In addition, many newer policies include features and benefits not available with older policies such as enhanced cash values, guarantees, and long term care benefits.

What is Life Insurance Review?

A Life Insurance Review is not a replacement program. Instead, it is a part of an ongoing assessment of your client’s ever-changing needs.

The focus of the life insurance review consists of analyzing your client’s existing life insurance to determine if it is appropriate for their needs and whether the type and performance of the life insurance will put the client’s goals at risk. 

Life insurance policies have advanced over the years. Today’s life insurance policies may offer more opportunities, enhanced features, higher death benefits and more competitive premiums than ever before. You may be able to introduce your clients to a new, more appropriate, better performing policy and in the process, uncover assets that may need protection.

Personal Changes

  • Family changes - marriage, divorce, new child
  • Experience caring for aged relative(s)
  • Improving health and/or lifestyle changes
  • New job, retiring, or changing benefits
  • New home and mortgage protection
  • Buying a business, selling business, or changes in business value/sales
  • Beginning a nonqualified benefit program
  • Increases in net worth
  • Protecting a child’s education funding
  • A desire to provide for grandchildren
  • Current retirement plan options may not allow adequate funding
  • Increased charitable commitment

Insurance Changes

  • Policies not performing as projected
  • Policies not sufficient for current needs
  • Newer products may be more cost efficient or offer better guarantees
  • Previously “rated” policy, may be standard today
  • New riders may offer more appropriate features such as Return of Premium or Guaranteed DB protection
  • Three benefits in one: death benefit, cash values for retirement, long term care
  • Some policies are scheduled for an increase in premiums

Key Clients

Any client could need a life insurance review, however, many of your clients will fall into certain key categories:

  • Younger clients – May have term insurance but their cash flow has increased
  • Middle-aged clients – May have term insurance, or only group term, which is inadequate. Recent experience caring for older relatives gives them pause regarding the burdens placed on their own children.
  • Business owners – If already “funding” buy-sell or executive benefit plans with insurance, they may find auto-pilot leaves them wanting in the long run.
  • Key Persons – businesses often reward key people or insure against losing them. Key persons can often influence business decisions. Reviewing policies on key persons may help the business save money or enhance benefit, or both.
  • Trustees – are accountable to the prudent investor rule and have a fiduciary liability which a regular life insurance review may help mitigate.

BD Life 212, LLC can help you better serve clients

We offer a comprehensive life insurance review program which will help identify problems associated with your client’s life insurance. Our program provides:

Our system provides you with a roadmap to follow with clients to ensure that they have the right amount of insurance, it is properly structured, and it is performing up to expectations. Please contact us today for more information.