Using Life Insurance Policy Reviews to Improve Customer Retention

By Nolan Taylor | November 5, 2012

Clients value advisors who look out for their interests. They especially appreciate it when their representative is proactive in helping keep their financial house sound. One area that is often neglected is life insurance. A comprehensive review of their current life insurance program will let the client know if their policies are in good order.

A review may or may not ultimately lead to a sale, but it will always enhance your standing with your clients. A review has few attendant risks with a high likelihood of positive outcomes. Either the client will be reassured that their policy is in good shape or you can point out better potential uses of insurance dollars already being spent. There are critical questions a client needs answers to in a comprehensive review.

What do clients currently own?
To answer this you need to obtain basic facts about the client’s policies. Information that is critical might include; policy type, death benefit, cash value, loans, ownership, beneficiary

designations, and so forth. A chart with all this information can then be given to the client and become part of their file. Many clients have never seen a comprehensive list of their life policies. If this is a far as a client chooses to go, it still will strengthen your relationship with them.

A review may not ultimately lead to a sale, but it will enhance your standing with your client.

Are the policies in good shape?
From the basic information on the policies it is a straightforward process to determine the condition of the policies. Sadly there are many policies that are seriously underfunded. If left unattended, these policies are in trouble. There are also many that are inefficient or poorly designed. Sixty to seventy percent of policies can be improved if the client is still insurable. Additionally, there are often problems with ownership or beneficiaries.

Are there better alternatives available?
Many factors can improve the economic performance of a life insurance program. There is fierce competition in the life insurance marketplace that has lowered net costs across the board. Additionally improved designs, aggressive underwriting, and ongoing promotions, provide the client many alternative that may improve their situation substantially.

How can they know for sure?
Although there appear to be better options available, it may not mean a client can actually get underwritten. By gathering basic information on a client, including medical records, (requires a HIPPA authorization) informal offers can be obtained before a client fills out an application or has a paramedic examination. Either the numbers work or they don’t. If they look favorable the client can choose to move forward. Even it turns out there is nothing better available, the client will at least understand their current situation and clean up any problems such as underfunding, ownership issues and beneficiary designations.

As a trusted advisor you should be aware of whatever life insurance your clients have. Helping them understand the life insurance products they own better enables you to serve them well. These clients will know they can count on you for guidance and advice in the future.

8 Reasons to Review Life Insurance Periodically

  1. Older policies are sometimes inadequately funded. Finding this out early allows time to remedy the problem.
  2. Beneficiary designation may no longer reflect the desires of the owner.
  3. Improper ownership can cause serious tax problems.
  4. There are often more cost effective policies on the market that use premium dollars much more efficiently, saving significant money.
  5. Improved designs provide better guarantees, and more flexibility. This allows policies to more adequately fit specific situations.
  6. The financial strength of insurance companies can change over time and sometimes weaken.
  7. The amount of insurance may no longer be appropriate for the purposes for which it was originally purchased.
  8. Insurance that is no longer needed can sometimes be sold for a lump sum in the life settlement market.

About Nolan Taylor

Taylor has worked in the insurance industry for more than 20 years. His focus is to collaborate with P/C agents and other advisors to design life insurance programs for a broad range of clients. He currently resides just north of Salt Lake City. He may be reached at

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Insurance Journal West November 5, 2012
November 5, 2012
Insurance Journal West Magazine

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