What's in a Policy Date?

Every life insurance policy has a policy date. The policy date is important to the carrier because it starts the clock with regards to the suicide clause and contest ability periods, due dates of renewal premiums, expiration date of grace periods and the duration of any extended term insurance. It's important to the insured/owner of the policy because it indicates to them when renewal premiums

are due and when coverage began.

The policy date is important, and you should be following up for a policy review based on this date with your clients. Periodic policy reviews offer you a unique opportunity because life changes but, for the most part, a life insurance policy doesn't. As part of an overall portfolio review, you can see what changes have occurred in their lives and ensure that their existing policies are still accomplishing their desired objectives. For referrals and prospects, it can be an eye-opening review that offers you the chance to talk about whether or not the life insurance policies they purchased are still the right policy type and coverage amount to meet their current needs.

Sometimes that term plan just isn't adequate anymore and should be replaced or converted to a permanent plan. If the insured has become ill or has chronic health issues that might cause them to now be a rated class or even uninsurable; conversion may be the only option available.

A major life insurance carrier, and leader in the life insurance industry, recently announced a huge increase in premium for their conversion UL product. Their only conversion product is being replaced by another product that could be as much as 300% more in premium cost than the current conversion product available. This has prompted a "fire sale" of sorts, especially for policy holders that placed their coverage many years ago and have not had a review.  So policy holders with this carrier are scrambling to make a decision about the future of their life insurance needs as well as possibly taking a chance that they will remain healthy and insurable because the only conversion product available is going to get very expensive. 

Is it possible that regular policy reviews for these policy holders could have averted this "scrambling" scenario? Maybe. Most clients are not going to seek you out for this service. Most are of the mindset that they have crossed one more thing off of their responsible adult list, so they put the policy away in a safe place and forget about it. 

Policy reviews only work if you actively seek out clients and conduct the reviews. You could even argue that it is your due diligence to conduct periodic policy reviews. So which client are you going to call first?