Many banks own life insurance as an investment option for meeting the obligations of various executive programs. Over the years, the life insurance industry has undergone many changes which have led to improvements in costs associated with maintaining life insurance policies. These improvements also include better policy guarantees and lower premiums, both of which enhance policy returns.

This has created an opportunity that could improve your life insurance without any increase in premium – excellent opportunities that, unfortunately, are often overlooked. In addition, the insurance industry has moved toward policies that transfer the future risk to the policy owner. This risk can provide opportunity for policyholders, but may also create surprises. To assure that life insurance coverage is up to date, it’s crucial to review policies annually and conduct a comprehensive review at least once every three years.

For Your Consideration When conducting a policy review, it’s important to consider the following questions: Have falling interest rates put your policy in jeopardy of lapsing? Does your policy have cash values that could be better utilized? Do you have policy loans eating away at your policy values? How has your policy performed relative to the initial projections and assumptions presented to you when the policy was sold? Has your insurance company’s financial strength or ratings decreased? An initial review can be conducted fairly quickly to determine if there’s an opportunity to maximize your policy. Then your existing health will need to be verified to see if you qualify. Remember — never cancel existing insurance until a new policy has been issued. Please contact me if you would like your policies reviewed.

For people in good health, we’ve found that more than half of the life insurance policies we review can be improved upon. This means you can save on your premiums, increase your benefits (with or without
making premium payments), or maybe even stop paying altogether!

Banks have a significant amount of life insurance to cover the costs of executive benefit plans. Banks need to review the performance of the life insurance as they would any other asset. It is important to look at all assets in today’s economic environment, but when it comes to life insurance you should consider these items:

• Are you dealing with high quality insurance companies that carry a rating of A or higher by AM Best?
• Do you review your allocations in an effort to keep your returns up in this economic climate?

The life insurance industry is constantly changing, and it’s crucial to stay informed. Like all other investments, life insurance policies should be reviewed regularly.