By:  Mark D. Milbrod, CLU, CLTC
Vice President, ASG

I love the Fall.  Of all of the seasons, it is definitely my favorite (and the reason why I will likely never move out of the Northeast).   On a fun note, and as a huge sports fan, for me fall brings us into Playoff Baseball, Football and the beginning of Hockey season.  And of course those Fall foliage trips that my wife loves so much (and makes me go on every year).  It also represents change as the leaves of the trees start shedding and we transition to the winter months.  And change is something that we have seen a lot of.


Change is definitely in the air and we have had our fair share.  We have seen product changes. Guaranteed Universal Life products are only available by a handful of carriers and even those have experienced major jumps in premiums.  We have seen a shift in term products as well with most carriers shifting towards Accelerated Underwriting Platforms in an effort to streamline the application process.


As we enter the last quarter, we are all thinking about how our sales year will end. Will I finish strong? Will I hit my goals, etc.? In an effort to bolster activity for year end, as well as giving us momentum into the new year, Policy Audits are probably the greatest source of generating instant client engagement and lead the path towards new sales.


The best thing about conducting policy audits is that the clients are already buyers of insurance products. When reviewing policies, we need to be looking at many things such as:


  • Health Changes
  • Underperforming contracts
  • Needs changing
  • Ownership & Beneficiary Issues
  • Life changing events
  • Tax Law Changes


Health changes can be a huge source of policy audit activity. Perhaps a policy was issued many years ago when there was a negative health event that was close to the time of the issuance of a policy that resulted in a sub-standard rating. For example, we recently completed a case where a replacement was made on a policy that was issued 8 years ago on a 61-year-old who had been rated Table 4 due to a cardiac event that took place 3 years before the original policy was issued. Now, 11 years past that event, and with stability, that same insured was issued with Standard rates. By utilizing a 1035 Exchange, premiums were lowered significantly and full guarantees to age 121 were achieved. These types of scenarios happen all the time. Sometimes they are as simple as uncovering an insured with smoker rates that has since stopped smoking.


One of the largest areas of opportunity that we see through Policy Audits are through life changing events. Older life insurance policies were purchased for different reasons (i.e. Income replacement, college planning, etc.). In many cases, the original need for the life insurance has diminished or gone away all together. In these situations, we are transitioning into the Long Term Care conversation.


These older policies, many of which have significant cash value, are being repurposed via 1035 exchanges into either income annuities and/or Hybrid Life-LTC policies. This type of transaction often uncovers the necessary funds to help protect against the threat of a long term health event.


Although the Policy Audit technique is an excellent way to work with existing clients, it is also a great way to open doors with new prospects. Asking them for the opportunity to review their existing coverage is an effective way of breaking the ice with those new prospective clients. In addition, it is also a way to get referrals from CPA’s, Attorneys and Trust Officers.


The fall represents a renewal and process to start a cycle all over again. In sales, our seeds have already been planted for the year and hopefully we are reaping the harvest by now.  With all the changes going on, have you planted the seeds yet for the new year that is fast approaching?  There is so much to talk to our clients about.  Use the changes wisely and as a backdrop to have powerful conversations with them that will undoubtedly lead to new sales opportunities.

Either way, don’t sell the Policy Audit short.  With all the changes going on, use the audit process to get in front of both existing and prospective clients.   The process will increase client activity, which in turn, will lead you to many new sales for year end and beyond.


Fall is in the air. Be sure to make it your best season ever!