Life Insurance Policy Review

What are the benefits of reviewing and improving your life insurance coverage? 

By not reviewing your life insurance policy every two years, there can be missed opportunities to reduce costs and upgrade the coverage. At the review time, it is a good idea to consider goals and objectives, ownership and beneficiary appointments, expiration dates and better alternatives.

With 30+ years of experience under my belt, I have seen remarkable innovation occur in this industry. To benefit from this innovation, policyholders are wise to adopt this simple task every other year. The only party that benefits when policyholders do not review their coverage is the insurance company. For example, life insurance policies now allow policyholders to take a no-cost advance against the face amount of the policy for health emergencies. In the event a policyholder needs a lump-sum cash amount to handle an unexpected problem, the policies with living benefit riders make this possible. Some companies allow up to a $2,500,000 lump-sum advance.

Individuals, families and businesses all benefit by enhancing their policies on a routine basis. Using an experienced professional helps to navigate the value of what is new in the market and how to best take advantage of appropriate changes. 

Institutional owners of life insurance policies and trustees of trust owned policies have adopted this discipline, much to their advantage. As a fiduciary, the owner is responsible for the policy and for keeping it in good standing. When trusts are owners of life insurance policies, we recommend that reviews are done on a regular basis. If the review is out-sourced to a professional, we suggest these reviews be done on a fee basis to ensure complete objectivity.

Long before other professionals began working in this area, we recognized the value of an unbiased, fee-based option to give trustees and owners the proper level of due diligence assurance and fiduciary compliance that comes with being trustee. 

For more than 25 years, I have been providing life insurance policy reviews for law firms, CPA firms and Trust companies, reviewing more than 2000 Trust Owned Life Insurance Policies (TOLI) on a fee basis. This has given me a great deal of experience about the value and benefits of reviewing these assets.

The life insurance industry is in a constant state of change adding to the complexity of this asset class.  Most life insurance contracts and their components are not understood well by policy owners. Having an objective professional to guide policyowners is prudent, whether you are the owner of your own coverage or the owner of another person’s policy.  



Trust Owned Life Insurance (TOLI) should be treated as a “buy and manage” asset.  Too often, life insurance agents offer only the buy function and not the manage function as this is typically not part of their standard discipline.  Every Trustee and Owner of a life insurance policy must ask themselves this question:  “Is there a difference in the value of a life insurance policy review done on a fee basis versus a free review?” Is the review being done as a way to create selling opportunities? The goal for policy owners is to develop a review and monitoring model based on best practices versus predatory practices. When the owner is in a fiduciary capacity, the review process should be done on a fee basis to ensure impartiality.


  • Has Life Expectancy lengthened?
  • Current health of the insured? Better or worse?
  • Insurance companies have introduced innovative new products and pricing techniques that reduce premiums and improve policy performance. For example, indexed universal life is a policy type that did not exist 20 years ago.
  • Interest and dividend crediting rates change.  These crediting rates are directly tied to the performance of a policy. The last 10+ years of near zero interest rates are seriously impacting dividend contracts and interest sensitive contracts.
  • Market conditions have changed which can affect policies tied to the markets.
  • Planning goals of the policy owner may have changed. Evaluation of current goals and objectives is an essential part of the life insurance policy review process.
  • New products have emerged, often making previous product selections less desirable in light of new options.
  • Federal Estate and Gift Tax laws –  have they changed which can impact the need for a trust to hold this asset.


  • Update original goals and objectives, including a policy summary.
  • Location of original policy and all amendments.
  • Confirm current contact information for owners, trustees, etc.
  • A review of policy structure, ownership, beneficiaries, payment methods, etc.
  • Assessment of possible underwriting class improvements.
  • An evaluation of the effect of changes in interest rates/sub-account performance, increase in cost of insurance, or any combination thereof. Updated carrier ratings provided from national rating agencies.
  • An objective evaluation on whether there is a more cost effective and reliable way to meet client expectations. 
  • Context Analysis –is the policy still suitable for the current estate plan, as circumstances are constantly changing in clients’ lives as well as applicable tax law.
  • Premium Funding Analysis – Many policies may lapse due to poor policy performance, leaving a sizeable premium increase. Current projections should be obtained to view the policy under different conditions.
  • Stress Test – Worst case scenarios should be analyzed.
  • Market Comparison – It is important to assess whether there are savings and other benefits available to the client should they choose to switch to a new carrier. 
  • Secondary Market Analysis – If it is determined that a policy is no longer needed or wanted, rather than lapsing or surrendering the policy, does it make sense to settle the policy?

Before a life insurance policy review is undertaken, it is helpful to speak with the insured/owner and their advisors in order to gain important insight concerning the policy’s origination, purpose of insurance and how it fits into today’s planning goals and objectives.

Please contact us at 561-869-4500 or email me to arrange a complimentary consultation about our policy review services.

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