Life Insurance Policy Review

Transcription

1 Family An Advisor s Guide to the Life Insurance Policy Review Protecting Tomorrow s Generation; Today

2 Why perform a Life Insurance Policy Review for your clients? It is critical to ensure your clients life insurance policies are still answering their changing needs and concern which is why it is necesssary to have periodic reviews with your clients to look out for their best interests. Our Life Insurance Policy Review programs help you demonstrate the value you offer to your clients. Many of your clients don t realize their life insurance needs may have changed since they first purchased this important benefit. As a part of setting financial goals, it is critical to ensure your client s life insurance coverage and policy provisions keep pace with their changing lives. Do your client s life insurance choices still make sense? 65% - More than 65% of Life Insurance Policy Reviews performed by us reveal the potential for improvement Common triggers to perform a review include: The need for life insurance increases or decreases Family or business situations have changed Interest (UL), dividends (Permanent whole life) or investment returns (VUL) have declined The insured s health has improved, offering opportunties for improved underwriting The insured s health has deteriorated, enforcing the importance of the existing policy remaining inforce The policy is more than four years old Loans, withdrawals or other policy changes could affect policy performance. Premiums on term insurance increase with age, making conversion to or purchase of a permanent policy more expensive if the insurance need continues. New enhancements with life insurance products provide living benefit riders that were not available at the original time of purchase. Page2

3 Good for your client and good for you Performing a Life Insurance Policy Review demonstrates your commitment to your clients and gives you a deeper understanding of their needs. An objective, consultive analysis brings clarity and gives your clients the transparency they deserve. A Life Insurance Policy Review: Reviews the current situation to fully understand life insurance needs. Determines if existing policies are still meeting your client s needs and if applicable, identifies needs for funding adjustments that may be more appropriate for your client s current situation. Considers any possible improvements in underwriting class or mortality changes to ensure proper policy expense management. Helps to clarify the provisions and benefits within the existing policy and also identifies any new benefits that may be beneficial to your clients. Considers alternatives that might better meet needs such as: Policies with secondary guarantees Extended maturity options Better loan provisions Lower policy charges Less expensive underwriting classes or mortality charges Reviews any new riders that might be available. Helps you build stronger relationships with your clients. Your clients are not the only ones who will benefit from the Life Insurance Policy Review program. This not only helps your clients modify, adjust and reaffirm their life insurance portfolio it also reinforces their confidence in you. In addition, you will strengthen relationships with trustees and it will also help you differentiate yourself from other advisors, gain referrals and develop relationships with tax attorneys, CPA s and other professionals. Page3

4 Life Insurance in 1990 Key Areas of Comparison 1990 Today Mortality Table 1958 or Interest Rates Current 6-10% 3-6% Guaranteed 4% 3% Type of Products Available Term Whole Life Current Universal Life All Products of 1980 Equity Indexed UL with and without Guarantee Guaranteed UL Variable UL with and without Guarantee Underwriting Requirements Finger Stick Full Fluids Information/Technology Limited, slow to become available Better understanding, internet availability with high degree of free flowing collaboration and innovation Page4

5 Life Insurance Today Example #1 Example # 2 Female, Age 57 Male, age 72 $1 million Whole Life with term blend Universal Life assumed 9% credit rate not guaranteed Originally $20,000 projected premium $35,000 projected premium payable for payable for 10 years 8 years Policy still requires two more additional Policy projected to lapse in 15 years payments RESULTS 1990 Highly Rated History of Cancer TODAY Standard New Guaranteed policy requires no additional premium RESULTS 1990 Standard Due to blindness TODAY Preferred Non-Smoker New policy guarantees coverage for 20 years Page5

6 Case Studies Eliminate Premium & Guarantee Coverage Insureds Male, age 81 and female, age 80 Underwriting Factors Male, issued Table C Female, issued Table A 11 year-old Whole Life policy Current Policy Facts Annual policy premium of $65,000 Premium required for additional 13 years Audit Results Provided Standard Non-Smoker on the female and Uninsurable on the male Clients were provided with two options and chose option 2 Option 1 Maintain current annual premium of $65,000 for 13 years. In year 14, utilize paid up additions to pay for premium Option 2 Move existing coverage, maintain the same benefit with no future premiums and guarantee coverage to age 120. Product Improvement Insured Male, age 75 Underwriting Factors History of Hypertension and CAD Current Policy Facts Policy face amount of $4,250,000 Policy relies heavily on invested portfolio Audit Results Proved client with Standard Non-Smoker Table 8 Client was provided with two options and chose option 2 Option 1 Rely on the policy value to carry the coverage to age 100. Option 2 Obtain a $5,900,000 policy with no future premiums and guarantee coverage for life Page6

7 Having the Life Insurance Policy Review Conversation New Clients Anyone who has a current permanent life insurance policy is a prospect for the Life Insurance Policy Review Program. Centers of Influence Any CPA, attorney, tax professional or trust officer who has advised a client on the purchase of life insurance, or is responsible for the maintenance of life insurance, may have clients who are prospects for the Life Insurance Policy Review Program. Your Clients Prospect your present block of business or client base. This is the business you are responsible for and what is most important for you to review. Questions to Ask Yourself Do you have clients with policies significant in size: Owned inside a trust? Whose continued relationship is important to you? Who have date policies more than four years old? Whose financial, business or personal situation has changed? Who were issued on a rated (impaired) basis? Who own whole life, variable life or current assumption UL? Answering yes to any of these questions indicates it is a perfect time to conduct a Life Insurance Policy Review. Page7

8 The Advantage of working with Dressander BHC We keep the focus on you, so that you can take care of your client s life insurance and financial planning needs. We are one of the largest, most dynamic brokerage agencies in the United States. We have a history and reputation of reliability, dependability and success in growing businesses like yours. We re not willing to sit back and count on our past successes. Instead we re constantly looking at the newest, most innovative ways to serve our advisors. We want to be your strategic business partner. Building lifelong relationships with you and your customers is what we do. Our job is to help you find ways to provide better products and services to your existing clients and while at the same time increasing your value and exposure enabling you to find new clients. We will analyze and identify your client s needs behind the scenes, and equip you with important and relevant information that sets you apart from your peers. We can work with you as closely as you d like, right down to sitting across the desk from you and your clients and helping explain the products that are right for their situation. Our Partners We are backed by the power of AimcoR Group, LLC. AimcoR is one of the nation s leader in independent marketing for life insurance, long-term care and annuities. AimcoR allows us to keep our focused on you. We have worked with our advanced underwriters for years and we trust them to take on even the most complex issues of estate planning, taxation, business insurance and even employee benefit plans. With (BGA Name) and AimcoR you ve got the best backup in the business. Our ability to offer you the critical resources needed to grow and prosper in today s everchanging competitive industry is the value we bring to the advisors that chose to work with us. We re committed to you and your relevance today, tomorrow and for years to come. Page8