Policy Audit

Do you have the right coverage? Consider a Policy Audit.

Among the most daunting experiences for people buying life insurance is evaluating their existing life insurance policies. At LIC, we fully appreciate the difficulty of determining whether or not to surrender, cash-in or terminate the "in force" polices for proposed new coverage.

Understandably, the decision shouldn't be taken lightly. Without understanding the fundamental principles of insurance and its unique language, it's difficult to accurately compare and contrast the differences of new policies against old ones. The more important issue is how to get the job done.

Policy Audit Options:

• Do it yourself. Doing the best you can to evaluate the old policies against the new proposals will prove to be a time-consuming and frustrating process and, in the end, it is highly unlikely that you will reach a dependable decision. We intend that this is taken as a caution - is it worth the risk of making the wrong decision?
• Hire an impartial, unbiased professional to review the competing proposals and choose the best for your circumstances. The key here is impartial and unbiased. Make sure that the person performing the analysis is not selling you insurance. Consult your attorney or CPA for a recommendation if you cannot find an agent willing or capable to act in this role.
• Use the agent who sold you the old policies. This is usually not a good idea, not because the agent will intentionally give you bad advice, but because any advice from that agent could be thought of as biased. We are often in this same position and we encourage our clients to have our recommendations reviewed by others - even competing agents. As long as there is one impartial person in the process, a good agent should never worry about scrutiny of their proposed ideas and/or products.

Whatever option you choose, demand that everything be in writing, including the proposals and any opinions about the recommended plan or coverage. All too often, we hear comments such as, "I am going to stay with my current policies, because my agent is not comfortable with the new proposal" or "My agent says the new proposal is too risky." When given such responses, determine the objections and concerns in writing. What exactly are they not comfortable with, what are the risks and how is it different than your existing coverage? Agents unwilling to provide written recommendations or criticisms of competing proposals should be avoided.

The area of policy audit and analysis one in which we have a great deal of expertise. We have been hired by law firms, trust departments of national banks (such as The Northern Trust) and accounting firms to provide independent audits of insurance policies for which they have responsibility as owners or trustees.

Over the past ten years, we have reviewed close to one thousand policies on a fee basis and additionally have designed and developed numerous products for insurance companies requiring a complete understanding of policy structure and analysis. Please feel free to contact us about our rates for reviewing existing or proposed policies.