4 policy review selling opportunities

There are many existing life insurance portfolios that are “chaos in waiting.” Helping those whose life insurance may be in chaos can not only help you with your sales, but also help you maintain and build strong, lasting relationships.

The most common question I receive as an analyst/consultant from a new client or from an advisor is: I have a policy from XYZ Insurance Company, and is it any good? And that’s the basic question that it always boils down to — is this policy (or policies) any good?

Four questions you should ask when reviewing a client’s existing policy:

1) Is there an appropriate amount of life insurance? Most likely, life has changed for the insured since buying the policy, and more life insurance is needed. Often, an individual will be under-insured and/or have policies that don’t fit their needs.

2) Can you lock in a level premium? On term insurance, the length of the level premium period remaining may fall short of the client’s anticipated period of need. If the client has an annually renewable term policy, then locking in a level premium can save them money.

3) Is the policy underfunded? Permanent life insurance policies can often be underfunded. You can assist the client by obtaining and reviewing an in-force illustration, showing how the policy will perform based on current assumptions. The policyowner may need to purchase supplemental coverage or replace the coverage with a newer/less-costly policy.

4) Can the client get a lower rate? Review the rate class that a policy was issued at. Depending on the client’s medical history, you can either assist the client in getting a lower rate on an existing policy or assist them in finding a new lower priced product.