10 Step Policy Review
1. HAVE YOUR CLIENT'S NEEDS CHANGED?
Is the original reason they purchased their policies still applicable? Often, the need for life insurance changes: Mortgage, Children, Business, Marriage.... A review helps you determine why they may need to make adjustments to their life insurance today and will allow you to add to their life insurance portfolio accordingly.
2. HAS THEIR HEALTH OR LIFESTYLE CHANGED?
Changes in their health or lifestyle can have a profound effect on policy costs or on the type of coverage needed. A review helps you make sure that your client's lifestyle and that of their family is protected.
3. IS THEIR COVERAGE COMPETITIVELY PRICED?
A review determines whether their coverage is cost-effective or can be obtained from a stronger carrier for less money.
4. IS THE AMOUNT OF INSURANCE COVERAGE ALIGNED WITH THEIR NEEDS?
As your client's net worth increases, it is not unusual for there to be a need to increase their coverage. The purchase of additional life insurance to meet their family’s needs may be warranted. In contrast, occasionally their needs may change in a way that will allow you to decrease coverage. In both cases, it is important to have their coverage in line with current needs.
5. IS THE LIFE INSURANCE COORDINATED WITH OVERALL ESTATE OR BUSINESS PLAN?
Lack of coordination between life insurance and an estate and/or business plan is common. Your client may be in need of insurance for a Key-Man policy or a buy/sell agreement. Perhaps something as simple as a policy which will collateralize a loan.
6. ARE THE BENEFICIARIES CORRECT?
Do the beneficiary designations continue to align with their wishes? Often circumstances have changed but beneficiary designations have not.
7. DO THEY HAVE THE MOST APPROPRIATE POLICY TYPE FOR THEIR CIRCUMSTANCES?
The types of life insurance products available have changed dramatically in the last 20 years. Term and permanent life insurance policies are now available in many forms.
8. IS THEIR POLICY PERFORMING AS ORIGINALLY PRESENTED?
Changes in interest rates, changes in variable policy sub-account performance, and the cost of insurance can affect several aspects of your client's policy, including the amount of their premium, the length of the premium paying period, and the duration of their policy.
9. DOES YOUR CLIENT HAVE THE NEW LIFE INSURANCE OR THE OLD?
There are new products being developed all the time, there are now policies that can provide for your clients in LIFE with Riders that cover Long Term Care Expenses, some policies even come with Refund of Premium options. There are many Hybrid Policies available now. The products are relatively new so most people don't even know these policies exist!
10. HAS YOUR CLIENT RECENTLY QUIT SMOKING?
If they have, their premiums will change drastically... believe it or not this is often a factor that is sometimes overlooked.
Quick Video About Reviewing a Policy
Policy review is always important! Aside from the many reasons above, simply put, is their current policy right for your client?
As clients get older their needs often change, they may need less insurance but different insurance, or they may need to pivot from term to permanent coverage.