Updated December 12, 2022, at 12:17 PM
Life insurance policy reviews are a critical component to sound financial planning for your clients.
Because chances are, you have plenty of clients with life insurance policies. But when was the last time any of them were thoroughly reviewed? And even if it has been recently, wouldn’t it be nice to get that task off your plate and free up your time to do things you love?
Utilizing life insurance policy reviews from industry experts not only ensures your clients have the best option for their needs, but it also builds trust and opens the door for new business opportunities.
That’s why we created our Comprehensive Analysis and Review (CAR) program. Our product experts provide you with the tools necessary to efficiently and effectively conduct a comprehensive client insurance policy review.
In short, a life insurance policy review is a thorough analysis of your client or prospect’s current insurance portfolio.
Why Utilize CAR?
The CAR program can demonstrate a sincere interest in your clients and prospects that extends beyond a possible sale, building a connection based on trust. Not to mention, you can provide viable and optimal solutions, not just sell a product.
A CAR life insurance policy review can also help you uncover sales and referral opportunities. This tool can comfortably put you in front of your clients and prospects and ask for referrals.
Once a client or prospect goes through the CAR program, even if no sale takes place, he or she will feel more comfortable providing you with referrals to their family, friends, and business associates.
CAR can set you apart from other financial professionals. In this business, you strive to stay ahead of your competitors, and by offering services such as comprehensive policy reviews, you can potentially shut the door on your competition. If you can add value to an insurance transaction, you’re ahead of the curve.
CAR Life Insurance Policy Reviews Can:
- Help and benefit your client or prospect
- Enhance your relationship with your client or prospect
- Provide new sales and referral opportunities
- Set you apart from your competition
Why Conduct Life Insurance Policy Reviews?
Life insurance may well be one of the most significant assets within an estate—whether it’s owned by an individual, a business, or part of overall estate planning. That being said, it’s an asset that’s generally not evaluated, reviewed, or appraised on a consistent and customized basis.
A client’s life insurance policy may provide funds to:
- Help take care of loved ones’ needs when they’re no longer here
- Pay for the education of children and grandchildren
- Pay off mortgage and other debts
- Leave a legacy
- Attract and retain key employees
- Protect business assets
- Supplement retirement income
- Offer emergency cash
Related: 7 Steps to Complete a Life Insurance Policy Review [CAR Program Infographic]
Like any other asset, it’s important to periodically monitor whether your clients’ life insurance policies continues to meet their needs, because life continually changes. Marriage, divorce, death, children being born and growing up, all with moves and career changes along the way.
Lifestyles change and health changes. Financial situations change, and goals change. Also, because life insurance is a financial asset, its performance may fluctuate and should be monitored to make sure it continues to meet your changing needs.
What’s Included in a CAR Life Insurance Policy Review?
- Evaluation of current objectives and needs
- Summary and analysis of existing in force policy (or policies)
- Illustration and review of alternatives
- Optional assessment of current medical underwriting
- Review of policy ownership and beneficiary designations as needed
- Ratings of the insurance companies
How Can I Conduct a CAR Life Insurance Policy Review?
Step 1: Schedule an Appointment
NOTE: CAR is only available to FIG-partnered financial professionals. To learn more about working with us, click here to get started.
Start by approaching your clients or prospects in various ways to ask if they’d be interested in a comprehensive policy review. If you’re talking with an existing client, you can mail them a letter, make a simple phone call, or send a short email. Scheduling a review can be as simple as asking.
“Mr. Smith, when was the last time you looked at your insurance policy?” or “Mrs. Jones, has anything in your life changed since we wrote your insurance policy three years ago?”
If you want to approach prospective clients about a policy review, you could ask them via mail, phone, or email if they have any insurance and when they last reviewed it. Let them know that products have evolved for the benefit of the consumer, and in some cases, pricing has improved as well.
Related: How Life Insurance Loans Work
Step 2: Discuss Objectives
Existing Policy
Your goal is to find out as much as you can about your client or prospect’s existing policy.
“Tell me about your insurance policy, Mr. Smith. When did you buy it, and why did you buy it? What else do you know about it?”
Any Changes?
Next, use this opportunity to find any changes in lifestyles since their first policy.
Next, use this opportunity to find any changes in lifestyles since their first policy.
“So, what’s new? What has changed since you first bought your insurance policy?”
The following life events can trigger an insurance discussion:
- Marriage or divorce
- New child
- Purchase of a new home
- Inheritance
- New job/retirement
- Change in debt
- Health changes
- Business changes (if insurance is designed for company purposes)
Planning
Now it’s time to find out the current objectives of purchasing a policy.
“Why do you feel you need this insurance today and for the future?”
Financial
It’s also prudent at this stage to conduct a financial fact-finder with your client or prospect before you make any product recommendation(s) from this review. You can contact our Life Division to obtain fact-finder worksheets to use with your clients.
Underwriting
You’ll also need to determine what your clients or prospect’s medical insurability look like. Ask if they have any current health issues and if they had any problems when they first purchased their policy.
If they answer “yes,” you’ll need to obtain more details. We’ve included a health questionnaire that can help you with this process.
In-Force Illustrations
If your client or prospect wishes to have his or her policy thoroughly evaluated, it’s crucial to gather as much current information as possible. To request an in force illustration from the existing carrier, you’ll need to have your client or prospect sign a release form.
Step 3: Analyze & Evaluate
We’ll carry the weight of the work involved during this step. Once we’ve received the in force illustrations and additional policy information, we’ll begin evaluating the policy.
We then work with you and our product portfolio to determine if we feel there’s a more suitable solution for your client or prospect. We’ll provide you with a client presentation consisting of a snapshot of existing coverage and a few possible alternatives.
Step 4: Provide Thorough Recommendation
Lastly, our CAR Policy Review Presentation will allow you to walk your clients or prospects through a detailed analysis of their existing policy. It’ll show them the features, costs, and benefits of the policy; as well as information about their beneficiaries.
The presentation will also provide a side-by-side snapshot of the existing policy versus a perhaps more suitable alternative.
Take the Next Step With CAR
The CAR program can catapult your firm past your competition while providing real, tangible benefits to your clients and professional relationships.
What are you waiting for?
Click below to learn more about this value-enhancing program today!
Keep Reading: Compare Insurance Offerings With Life Insurance Policy Reviews [Case Study Included]
For Financial Professional Use Only
The content within this post is for educational purposes only and does not represent legal, tax, or investment advice. Customers should consult a legal or tax professional regarding their own situation. This presentation is not an offer to purchase, sell, replace, or exchange any financial product. Insurance products and any related guarantees, features, and/or benefits are backed by the claims-paying ability of an insurance company. Insurance policy applications are vetted through an underwriting process set forth by the issuing insurance company. Some applications may not be accepted based upon adverse underwriting results.