Insurance Policy Audit

Get a Complimentary Insurance Policy Audit by Sokol & Eisenberg Insurance

The insurance policy you purchased many years ago may not be the right fit for your lifestyle today. It may surprise you, but auditing your insurance policies every so often is a smart thing to do. You could save yourself a lot of money, or you could have better options that make you more money. Regardless of the outcome, our experts at Sokol & Eisenberg Insurance can perform an audit of your policies at no charge. Use the form to the right to start the process.

Reasons to Review

Life insurance performance has deteriorated across the board.

The persistent low interest rate environment has hurt life insurance companies and life insurance products. Clients need help understanding the magnitude of this impact.

Health has changed.

Any change, for the better or for the worse, triggers the potential for the policy to be inefficient and cost more than it should.

The life insurance company has changed. Sometimes literally.

Life insurance companies are complicated financial entities that change dynamically, but not all these changes make the headlines. Mergers and acquisitions mean the company that issued the policy is no longer the company that is responsible for it.

The estate plan has changed.

It is surprisingly common to find that important life insurance is left out of the current planning and is owned by an obsolete trust.

Risk tolerance has changed.

The financial crisis of 2008 has redefined investment risk for many people. Life insurance should match this change in philosophy.

New products offer better value.

Improved technology creates better value in everything from automobiles and televisions to life insurance. Existing policies may have been the “best in class” when purchased, but may no longer reflect current industry pricing or features.

The coverage is term insurance.

Term insurance has its own set of management challenges. Conversion rights are like call options that need to be evaluated to determine their intrinsic value. The level premium period may no longer match the need.

The coverage is whole life.

Clients with term blended whole life are likely facing not only continuing premiums, but the choice of either increasing premiums or reducing death benefits.

What to Look For

Policies that have not been reviewed in the past three years

Clients with a significant change in health

Changes in client lifestyle, net worth or financial obligations

Clients who have made lump sum gifts in 2011 or 2012

Changes in client risk tolerance

Clients who get premium notices that they do not understand

Changes in the insurance company behind the policy

Clients concerned about the financial health of their insurance company

Term insurance on clients over age 60

Our Review Process

What do you own and why do you own it?

The first step is critical and in many cases the most difficult. Many insureds don’t understand what type of life insurance they have, or are confused about details of ownership (Which trust? Who is the trustee?) In some cases policy ownership triggers taxation of death benefits or pays the death benefit to the wrong person.

What is the status of each policy in the portfolio?

Simply asking “What is happening with each policy?” can be a daunting and enlightening task that is aided by our long-established relationships with major

insurance companies. We sometimes learn that coverage has lapsed, or that contractual options are about to expire.

How is each policy performing?

Comparing current performance to the original design is sometimes useful and sometimes moot. We take an agnostic empirical approach to this question, treating cash value and premiums as investments in life insurance that produces a return measured by the death benefit. This creates a uniform standard from which comparisons can be made.

How does the current performance mesh with the life insurance need?

Evaluating the performance of a life insurance policy only makes sense in the context of an insured’s situation. We often ask clients to forget what they already own in order to identify current needs. We also evaluate the product type to make sure it lines up with the current risk tolerance.

Can the performance of the current policies be improved?

Can policy funding be suspended, or deferred into the future? Is repaying a policy loan a good use of funds? Are dividends providing the same or better return as the base policy, or should they be taken in cash instead? This is often a complex step as we explore the subtle nuances of each policy.

Is there a better alternative?

We can benchmark policy charges against a product peer group when necessary. This final step also addresses the financial condition of the insurance company. We can customize an evaluation of the current marketplace to reflect the insured’s health and determine if performance could be improved

I’m interested in a complimentary insurance policy audit