Life Insurance Policy Review Leads to Savings & Better Coverage.

There are many reasons for reviewing your current, inforce life insurance coverage but the most important one is to shop the market to determine its suitability – to make sure it is the best policy available now. 

The benefits of policy reviews are underestimated. Policy reviews lead to better rates, better coverage, or both. The review process begins with a reconsideration of goals and objectives. It’s a good time to think about proper ownership, tax law changes and beneficiary designations. It is also a great time to review coverage duration, internal charges, the term conversion deadlines and it’s an opportunity to learn about current innovations. There is nothing inherently wrong with replacing one life insurance policy for another and it is a decision that requires professional guidance.

Not ‘All Set’!

If I only had a dollar for every time I’ve heard “I’m all set” in response to an offer to review one’s life insurance portfolio. In fact, it is rare to find a person who does not benefit from new and better products, even though they are older. Understandably, most people think getting older is working against them when it comes to buying life insurance. That is not necessarily the case, especially with permanent life insurance and when cost of insurance charges are improving faster than we, as individuals, are aging. Although it may be intuitive thinking, it is working against you as a life insurance consumer. Insurance companies are constantly striving to improve rates and improve the features and benefits within their core products. Reviews are a necessary part of owning life insurance.

We have witnessed remarkable innovation in this industry over the past several years. A willingness to routinely review inforce coverage is the only way that policyholders will benefit from these innovations. The only party that wins when policyholders do not review their coverage is the insurance company. For example, life insurance policies now allow policyholders to take an advance against the face amount of the policy, for health emergencies. In the event a policyholder needs a lump-sum of cash to handle an unexpected health problem, the policies with accelerated benefit riders make this possible. Some companies allow up to a $2,000,000 lump-sum advance.

One possible outcome of a routine life insurance policy review is learning that your coverage does not need improvement. When that is the case, it is usually due to a negative change in health.

Wouldn’t you rather have a policy that gives you the option to take an advance against the face amount, at no additional premium cost? Simple policy reviews lead to policy improvements and other innovations.

We all benefit by reviewing our policies on a routine basis. Using an experienced professional is the only way to navigate what is new in the market and take advantage of any 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 outsourced 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 advocated for the value of an unbiased, fee-based option that gives trustees and owners the proper level of fiduciary compliance, required of trustees. 

For many years, I have been providing life insurance policy review services 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. For example, in life insurance premium financing situations, annual reviews are recommended because there are many variables to track. There are not many life insurance professionals with the experience in both premium financing and reviewing the policies used in financing arrangements.

Life insurance products are built on assumptions which adds to the complexity of managing 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’s policy.  



Life Insurance 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 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 a 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?

Please contact us at 561-771-4647 or email me to arrange a complimentary consultation about a policy review.