Life Insurance Audits

Our Life Insurance Audit service is designed to thoroughly evaluate the performance and viability of a client’s current permanent life insurance policies.

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Step 01

Life Insurance Review

The first step of the Life Insurance Review is to assess past and projected future performance of the current policy to determine if it has performed as originally intended and if it will continue to best meet the policy owner’s needs in the future. As an initial step we provide the following:

  • Summary of current policy values
  • Explanation of the current type of policy
  • Review of the surrender charge schedule
  • Mortality assumptions and life expectancy data used to price the current policy
  • Review of the underwriting rate used to price the current policy and determine if a rate class/mortality cost improvement is possible in the current marketplace
  • Review of the underlying life insurance company in context with current market trends
  • Explanation of certain other relevant contract provisions

Step 02

Policy Performance

We will concurrently request in-force illustrations that take into account the actual performance of the policy since it was issued and show how the policy may be expected to perform in the future based on certain assumptions. The overall goal of the in-force illustration review is to determine if the policy is adequately funded at the current premium level. Given the prolonged low interest rate environment, less than anticipated market returns and other factors, it is very common for policies to lag the projections shown on the original illustrations.

We will perform a detailed review of the insured’s medical history and records and evaluate any health changes that have occurred since the policy was issued to provide an updated assessment of the insured’s life expectancy. Changes in the insured’s life expectancy – longer or shorter – since the policy was issued have a significant impact on the course of action that is ultimately chosen.

Step 03

Life Insurance Review

The end goal of a life insurance audit is to determine what actions should be taken in light of the policy’s past and projected future performance. Possible suggested actions include:

  • Maintain the current policy “as is”
  • Restructure the current policy by changing certain policy elements such as the amount of premium paid, the optimal premium schedule, the death benefit, etc.
  • Replace the current policy with a more competitive policy.