Broker Check


What you Need to Know

Review: Provide a written and measurable review that meets the specification in the UPIA

Analyze & Compare: Suitability, Company Owned Life Insurance (COLI), Carrier Financials, Historical Performance, Liquidity, Premiums, internal expenses, cost-benefit comparison, and benchmarking are all components of proper due diligence.

Fulfill: All 3 fiduciary duties must be met; Monitor, Investigate and Manage.

Examine and Identify:  All expenses and potential overpayment of premiums should be scrutinized. Strengths and weaknesses of the current policy need to be weighed against other products available in the marketplace. Most importantly, the policy needs to meet the necessary objectives.

With all of the risks and components there are several items that fiduciaries need to keep in mind:

  • A report that tracks carrier health, lapse exposure and competitiveness may only provide the duty to monitor.
  • The lapse risk analyses must be completed by someone who is truly independent.
  • It is important to know and manage to both state and federal guidelines.
  • Proper documentation is required regarding the internal cost of insurance, administrative expenses, and any fees. Gifts to trusts also require proper notice and must meet payment deadlines.
  • There are selling and servicing agents who call themselves independent, but actually, have a conflict of interest with regard to certain policies.

 UPIA Compliancy requires:

  1. Annual Policy Review
  2. Policy Values Updated Annually
  3. Policy Lapse Tracking risk
  4. New Illustration Requests
  5. Variances Models
  6. Non-Trust Owned Policy Reviews
  7. Policy Value and Premium History
  8. Policy funding analysis
  9. Policy Rider Administration
  10. Policy Loan Risk and Management
  11. Disclosures (Policy Lapse, Loan Issues, etc.)
  12. Premium Due Reports
  13. Policy Loan Tracking
  14. Document Repository
  15. Access to Illustrations, etc.
  16. Beneficiary Tracking
  17. Multiple Premium Payers & Addresses
  18. Insurance Company Contacts & Financials
  19. Identify Policy Structures such as Split Dollar, etc.
  20. Death Benefit Increase or Reduction
  21. Term Conversions
  22. New Policy, Policy Replacement or Material Changes