1. The Life Insurance Audit Brett Lotspeich

2. What is the Life Insurance Audit?
The Life Insurance Audit provides a comprehensive evaluation of the performance of Life Insurance as well as recommendations to optimize these policies.
The evaluation will:
validate the appropriateness of coverage
ensures the coverage is titled appropriately
assess mortality and underwriting risks
provide a specific action plan with numerous options for their existing coverage

3. The need to manage Life Insurance
A Life Insurance Audit provides valuable information
74% of existing policies can be restructured to provide greater value 1
At least 32 million U.S. households own insurance policies that are not appropriate for them 2
64% of those insured do not know what they currently have, or why they bought a policy 3
1 Ash Brokerage Advanced Markets Internal Marketing Study, 2010
2 Insurance Information Institute, 2008
3 TheInsuranceAdvisor.com

4. TOLI – Active Management of the Life Insurance
Lifestyle Changes
Family, financial or business status may impact life insurance coverage needs
Underwriting Advancements
Medical advancements, improvements in underwriting technology, as well as life expectancies, may impact product pricing
Interest Crediting Rates
Interest rates on life insurance policies have been impacted by overall market volatility and may cause policies to not perform as projected
Underfunded Policies
Policies that were underfunded may result in longer payment periods or higher than expected premiums

5. TOLI – Active Management of the Life Insurance
Loans, Withdrawals or Other Policy Changes
Loans, withdrawals or other policy changes may affect the policy’s performance.
Legislative Changes
Regulatory changes to state or federal estate laws may impact the policy.
Company’s Financial Strength
Ensuring the strength and stability of the company as reflected in the financial ratings of the major rating agencies.

6. Trust Account Crummey Notices Crummey Period Fiduciary
TOLI – Trustee Duties
Trust Account
Maintenance and appropriate usage of the Trust account is required.
Crummey Notices
Timely and consistent notification to Beneficiaries of the gift
Crummey Period
Maintaining the funds for the entire Crummey period.
Fiduciary
A standard of care is required under the Uniform Prudent Investor Act

7. Fiduciary Duty
Duty to Monitor
Duty to Investigate
Duty to Manage

8. It Seems Easy……… What we’ve learned
Over 6,000 completed Audits -
65% of the time there is a significant issue with the current coverage:
Titling! – 72yr old Rancher
Calls from Divorce Attorney’s?
Simple Health Changes
Who is being represented?
Basic underwriting or case structure issues
Lack of preparedness or follow through on the fulfillment of administrative duties.
Who is managing what, if anything?

9. The Life Insurance Audit
Provides Peace of Mind
Reviewing trusts’ TOLI policies can help protect fiduciaries from liability, assure that a trust’s intent is persevered and solidify the advisor-client relationship.
Ensuring that the client’s planning will meet their needs when they really need it.
Opportunity for the entire advisor team to re-engage with the client and secure the planning goals.