Life Check: Does Your Client’s Policy Still Fit Their Life?
Life insurance isn’t “set it and forget it.” It’s a living part of a client’s overall financial plan. Implementing a regular policy review process helps you and your client confirm whether the policy is doing what it was designed to do — or reveal smarter ways to protect what matters most. Now that we’re about a month into the new year, it’s the perfect time to revisit promises made five, 10, or even 15 years ago and measure them against today’s economic realities.
In a world of market volatility, increased regulation, and heightened consumer expectations, policy reviews aren’t optional — they’re essential. Done well, they’re more than an administrative checkbox: they’re planning conversations with your client, supported by a thorough risk audit of the policy’s performance to determine whether it remains an adequate solution for your client’s key objectives. They also give you — the trusted advisor — the opportunity to deliver visible, ongoing value.
The intended outcome of a smart review is to answer the big questions:
1. Is the policy adequately funded?
2. Is the death benefit still appropriate for the client’s current life and needs?
3. Are there any looming lapse risks, inefficient riders, or opportunities to adjust current strategies to improve the likelihood of meeting the client’s objectives?
Maintaining a regular cadence of policy reviews strengthens client relationships and demonstrates diligence, ongoing value, and a commitment to stewardship. Most importantly, it helps ensure the policy is there when it’s needed most.
Find Your Starting Point
If your clients hold policies issued within the past 15 years, start by assessing these risk hotspots:
1. Universal life policies (especially 2008–2014): Many UL and GUL policies from this period were illustrated using interest assumptions that haven’t held up. In addition, some carriers increased Cost of Insurance (COI) charges on in-force blocks to address balance sheet pressures and market underperformance. If these contracts haven’t been reviewed recently, they may be materially underfunded relative to the original illustration.
2. Premium offset strategies: What once sounded appealing — “Pay premiums for a set number of years, then let policy dividends or crediting do the rest.”— may no longer be viable. After sustained periods of lower-than-projected crediting rates, clients who expect policies to “carry themselves” may now face funding gaps, reduced performance, or heightened lapse risk.
3. Loan-heavy policies: While policy loans can provide flexibility, compounding loan interest — especially in a higher-rate environment — can outpace policy crediting. This can cause the loan balance to converge with cash value, creating an inverted policy load that leads to lapse and potential unexpected tax consequences.
Pro tip: While annual in-force illustrations are necessary, they are not always sufficient. A meaningful review should evaluate policy mechanics, funding strategy, and client intent, not just ledger values.
Kickstart Your Review Process
To help you strategize and prepare, we’ve built resources that can be used to help uncover risks, spot opportunities, and deliver confident recommendations. Here’s a sample of some of the steps we encourage you to take:
• Review this short educational piece on why every client needs an annual life insurance check-up
• Review these nine tips to help prevent making beneficiary designation mistakes
• Review our annual policy review workbook
• Read Retirement & Life Insurance: What Changes at Age 60+? to explore how you can help a client nearing retirement who realizes their existing term policy is about to expire
• Review Life insurance strategies for high-net-worth clients, if there is a significant increase due to inheritance or business growth.
You don’t have to do it alone. Our team can help analyze in-force contracts, model alternatives, and design the right solutions. Let’s protect your clients — and uncover new opportunities — together.
Explore more in our latest issue of Making an Impact or visit our Policy Review Hub to get started.