How to Conduct a Successful Annual Policy Review in 4 Easy Steps

Congratulations! You did it!

You helped your client start an Indexed Universal Life (IUL) Insurance policy, which will give their family tax-free death benefit protection.

The new policy will also help diversify their retirement plan by building the policy cash value without market risk that can be used for tax-free retirement income.

It looks like everything is perfect, but there is more work to be done to ensure the policy performs at its full potential.

Introducing the dreaded annual policy review!

For many advisors, annual policy reviews are “just too confusing for my clients,” “a lot of work,” or simply “unnecessary.” This couldn’t be any farther from the truth.

Annual policy reviews are a must; not only for the sake of your client’s policy, but for your business as well.

Just think… if you could meet with your clients once a year to check-in with them, discuss the other services you can provide to them, and ask them for referrals, you would probably never miss a meeting!

These are exactly the types of opportunities you have when holding an annual policy review with your client.

The annual policy review doesn’t have to be complicated, either. By guiding your client through these 4 easy steps, you can stay on track while identifying new opportunities along the way.

Step #1: Check-In With Your Client

Start this meeting off by continuing to build rapport with your client by discussing how their year has been, and listening to what the client may have on their mind. If they have any concerns, make sure you make note of them so they can be addressed.

You’ll ask some specific questions later, but this is your time to have a casual conversation with your client.

Step #2: Review the Policy Summary

Next, you’ll want to go over the annual review statement from the insurance carrier, as well as any annual report that has been created.

Preferably, you’ll have a report that will include both the current numbers from the insurance carrier and the numbers from the issued illustration so that you can make sure that the plan is being executed as originally planned.

You’ll want to discuss how the premium payments have been made. Are they being paid as expected? If not, what’s altered their plan?

The next items to look at are the costs, the actual rate of return, and the interest credited. If these are better than projected you’ll have no problem going over these numbers, but what do you say when the policy has a 0% return?

This is the time to reassure your client that their policy is a long-term solution where the costs are expected to be higher upfront, with variable returns along the way. You can also explain to your client that this first-year return is the least significant return year out of any because there is only one year of premium in the policy.

The last items to compare between the annual statement and the issued illustration include the current death benefit, surrender value and costs over the last year.

LifePro Annual IUL Policy Performance Review Report

Step #3: Identify Changes in Needs

The third step in the annual policy review is to identify any changes in your client’s needs. Perhaps there have been changes in marital status or a major purchase has taken place, including a new home. To keep this part of the conversation succinct and organized, it would be smart to provide a needs reassessment checklist for your client to fill out. A few of the popular questions include:

  • Why did you purchase the policy in the first place? Have any of those reasons changed?
  • Do you want to change the beneficiaries of your existing policy?
  • Have there been any major changes to you or your family’s health?
  • Have you had or do you expect any major changes to your expenses?
  • Has there been any major income changes, or have you received any inheritance?

There are definitely more questions to add, but these are an excellent start.

This is the time to discuss any additional services you may be able to help them with. Especially when they get closer to retirement, they may need more help with managing their financial goals.

Your goal is to provide them with peace of mind throughout these years. By doing so, they will feel comfortable coming to you for any additional services you may provide.

Step #4: Referrals, Referrals, Referrals

A Top of the Table level advisor revealed that a whopping 1/3 of his new business actually comes from referrals! With this in mind, it’s important to never underestimate the power of maintaining an ongoing relationship with your clients.

By just staying “in front” of them, you will become their “trusted financial coach,” and they will come to you for their other needs, but more importantly, they will likely refer their family and friends to you as well.

By showing your client the value you bring to them and letting them know about the other services you can provide, they are more likely to refer qualified prospects to you.

That’s it!

By following these 4 easy steps you can conduct a successful annual policy review with your client.

Be sure to bring along a customized report to your next annual policy review to help guide you through these 4 steps and provide your client with all the information they need.

LifePro Annual IUL Policy Performance Review Report
LifePro is a premier distributor of life, annuity, long-term care, and securities-based insurance products serving financial professionals nationwide. The company was formed solely to help independent insurance agents, financial planners, and other financial service professionals become successful.