Annual Review of Life Insurance Checklist

Each year, you should analyze the different insurance
policies that you own to ensure that you are paying the right premiums, your
coverage is exactly what you want, and you know what your cash value is etc.
Here is a checklist of items which should be reviewed each year.

• Make a complete list of policies and actual
  policies if available. You should include group plans, entity
  owned coverage, trust owned (both pension trust and insurance trust) and
  policies owned by other people (shareholders and/or employees).

• Each policy has an anniversary
  report. Universal life and Variable life carriers provide an
  annual summary of all policy transactions, including increases and decreases
  in cash values, and death benefits and premiums received. Whole
  life carriers provide statements showing past dividends and how they are
  applied to the policy. Other related correspondence from the
  life insurance carriers and insurance agent/broker should be
  included.

• Obtain in force illustrations for all cash
  value policies. Universal life insurance policies must be
  reviewed in force illustration. They show current premiums being paid and
  what happens to current (non-guaranteed), and guaranteed
  values. Also, you should find out the minimum premium to
  provide $1 of cash value at the insured’s age 100, at both current and
  guaranteed assumptions. Whole life insurance policies must be
  reviewed in force illustrations, which show the earliest possible year in
  which the policy premiums could be offset by dividends. Also,
  review illustrations which show the premiums paid in all years, and
  illustrations which omit any term blend rider that may be part of the
  policy.

• You should have written confirmations from each
  of the following Life Insurance Co.: Owner/ beneficiary, cash
  value (accumulated and surrender), additional policy benefits/ riders,
  loans/ interest rates, modified endowment (MEC) status, approved
  underwriting class/ rating, policy split language (divorce or tax law
  change on survivorship (2^nd to die) plans.

• Review life insurance trust documents, such as
  trustee(s) confirmation, crummy letters, bank statements for the trust
  checking account, tax ID numbers, shareholder agreements, split dollar and
  collateral assignment documents and gift tax returns.

• Review your client’s financial position and
  medical history. This should include their purpose of
  coverage, unwanted coverage, which can be sold on the secondary market,
  finance premiums from lenders and out of pocket costs.

• Also check if the term insurance cost can be
  lowered, or the period extended.

• Check when term insurance premiums rise, and
  when supplemental group term insurance costs will rise.

Convert if the client’s health changed before expiration of the
conversion period.