The NEW Financial Dialogue
Life Insurance Policy Audit & Review Based on a study by the National Association of Insurance Commissioners, over 60% of people who own life insurance have no idea what they own or how it works. Twenty-nine percent of people also said that they need more insurance but no one has asked them about it. We all know that life insurance is not easy. It’s hard to know if you have the right kind of insurance. It’s hard to know if you have enough and it’s hard to know if you need any at all. Today’s life insurance policies are complex financial instruments and should be monitored like any other asset in your portfolio. The insurance companies have made it even harder by confusing us with products like:
Lou J. Fuoco, CPA Managing Partner lfuoco@fuoco.com
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Term Whole life Universal life Variable universal life Indexed universal life Survivorship Flexible premiums
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Renewability Convertibility Investment in stocks and bonds, some not Cash value guarantees Definite and indefinite periods
Why be surprised? A life insurance policy surprise is almost never good. A policy audit & review can tell you if your policy is in trouble or headed for it, and what corrective action may be possible. It’s important to understand that life insurance is not a buy-and-hold proposition. Like another asset it must be actively managed. Performing an periodic audit and review of your policies accomplishes that. An audit and review considers factors beyond just the policy statement and includes product suitability, product design, and performance. The following are some of the areas evaluated: • Does your policy still meet your financial needs? • What was the original goal of the policy? • Is it still valid? If not, what is the new goal? • Is the original beneficiary designation still appropriate? • Is the policy ownership structure still appropriate? • Can you get more coverage for the same premium payment? • Can you reduce your premium payment for the same amount of coverage? • Has your health improved, thereby creating the opportunity to reduce premiums? • Are policy charges competitive? • Is the insurance provider financially stable? If you have not done so recently, we strongly recommend that you review your existing life insurance policies. At TFG, we offer a FREE audit and review of your policies. Contact us at 561-209-1101
Did you know that a policy’s long-term guarantees and projected performance are only as good as the financial strength of the insurer? A permanent life insurance policy is literally intended to be in force for a lifetime: yours. An audit evaluates an insurer’s financial health as determined by various rating agencies and provides a review of the company’s financial strength as compared to statutory requirements and other insurers. Did you know that approximately 40% of non-guaranteed universal life policies and approximately 35% of variable universal life policies are illustrated to lapse during the insured’s lifetime or within five years of life expectancy? An audit evaluates premature lapses in policies, especially those that were intended to last insured lifetime. Did you know that a “guaranteed renewable” policy is very important because without it, reduced health could render you uninsurable? Did you know that a significant number of policies have the wrong ownership and incorrect beneficiary language causing unintended income tax problems and can have disastrous consequences for the owners and their families?
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