Life Insurance Policy Review

1. Life Insurance Policy Review

2. Life Insurance Policy Review Performance Evaluation is a planning concept designed to assist you in exploring the need to review existing life insurance policies and comparing those to current market offerings. When our policy evaluation is completed you should be in a position to make an informed decision as to whether you should make suitable changes or maintain your current insurance program as is.

3. Your Financial Tree All the branches of your financial tree require care and maintenance. Due to changes through the passage of time, be it personal or in the market place, it may have become necessary for you to make some changes. It is a good bet that your insurance company has never contacted you to inform you know that a new mortality table has been released lowering the cost of insurance, or that a new insurance product has been released that better suits your needs and or is perhaps less expensive and this is why you must always be proactive in these matters. • Retirement Accounts Policy Evaluation gives you an understanding of actual policy performance with an eye towards maximizing value. Life Insurance • Stock Portfolio • Real Estate • Fixed Income Portfolio As your financial tree grows, each branch needs regular care and maintenance. Call today for a complimentary life insurance review.

4. J. Streicher Policy Review Process • You spend your life building a portfolio of stocks, bonds, real estate and IRA's. • You keep a good pulse on the performance of these financial products, monitoring market fluctuations, interest rate trends and pricing efficiencies. You continually set and re-set investment objectives as your life’s plan evolve, making changes to both financial product and investment strategy, as needed. • Formally or informally, you’ve set up a periodic financial review process tailored to your individual needs. That’s good financial practice. • Life insurance products are financial products that require similar periodic care. • Subjecting your life insurance portfolio to a formal policy review process is an important, financially sound practice. Periodically reviewing the role that life insurance plays can make a marked difference in your ability to reach your goals. • Has your current Life Insurance product performed up to or exceeded expectations? Have those expectations changed since policy inception? Does the marketplace offer more efficient products? Has your life’s plan changed? Product Pricing & Performance Product Improvements Needs Analysis • Change is one thing you can count on. Dramatic improvements in medical science has come with corresponding increase in life expectancy. The policy you bought, when you bought it was (most likely) an excellent product. • Better Cost Adjusted Coverage • Business start-ups become industry leaders. Children grow up and have children of their own. Bigger houses, smaller houses, vacation houses, Tuition, Retirement. A lot can change in your life after you buy a life insurance policy – and those changes can affect the policy you own. • Products today are much more efficient than they have ever been. Medical advancements and healthier lifestyles contribute to longer life expectancies. New product developments have changed the landscape completely. • Because of this, many new policies have lower mortality expenses than existing policies, sometimes significantly lower. This may result in a reduced cost for life insurance. Even if your policy has performed up to par, the innovative products available today may improve cash accumulation, strengthen underlying guarantees or reduce premium outlay.

5. J. Streicher Policy Review Process Result • Why? Evaluation • Result • Why Do A Review? • Evaluation Performance Evaluation offers a free analysis of your in-force coverage, reviews your current life insurance needs and integrates both with the best products the market has to offer (which may just be the one you’re currently holding!) The end result may validate your original policy, offering a few suggestive funding tweaks, or It may also result in a complete policy overhaul. Either way, you achieve the goal of evaluating an important financial product in your portfolio – your life insurance policy. Performance Evaluation helps keep your financial strategy intact. If needs or plans have changed, then your policy may need to be adjusted to fit new circumstances. You may have too little or too much insurance for the present situation and future goals.

6. Carrier Selection Process • Medical Underwriting Financial Underwriting • The life insurance carrier you choose to cover the risk could be as important as the risk amount and product type. • There are many things to take into consideration during the carrier selection process. when buying insurance and take into consideration the following factors in your carrier selection process • Each individual life insurance carrier offers their underwriters distinct guidelines from which to underwrite a risk both medically and financially. • J. Streicher Wealth Management is your guide in the carrier selection process and your advocate in the underwriting process. • Financial risk assessment offers up an entirely different set of underwriting skills. The life insurance carrier chosen to underwrite the amount at risk depends on the size of the risk, the nature of the risk, and the required financial justification supporting that risk. • One carrier may underwrites a particular medical risk better than another. Since each carrier offers slightly different guidelines when it comes to underwriting certain risks, it is important to “customize” the carrier that best fits your personal risk factors. • Policy Selection • Because we familiarize ourselves with risk selection and the tools underwriters use to assess risk, we offer you a unique benefit that most practices just don’t understand. • Underwriting large face amounts or complex advanced concepts requires certain sophistication by both the life insurance carrier and the underwriter.

7. Carrier Selection Process The size of a carrier should be a factor as well. Would you want to risk a $10 million claim on a carrier with admitted assets of $100 million? That’s 10% of the carrier’s total assets. Generally, carriers with greater assets have the ability to accept larger risks more favorably. This is the most obvious in the selection process. A carrier may rank highest in all other factors listed, but it must have a competitive product to bring to the marketplace. Policy Selection Third party carrier ratings offer an unbiased financial measure as to the stability and claims-paying ability of a financial institution (ie A.M. Best Company, S&P, and Moody’s) Often times one gets what they pay for, which is why it is very important to consult your Life Insurance professional on the important product features and riders available on any recommended life insurance contract. • Carrier Size Price Product Design • Rating • Carrier Selection • Performance Evaluation offers a free analysis of your in-force coverage, reviews your current life insurance needs and integrates both with the best products the market has to offer. • All of these factor should be considered in tandem during the selection process.

8. Our Experience is Your Guide J. StreicherWealth Management has long standing relationships with many top rated insurance companies and offers a wide choice of quality products designed to help you meet your diverse personal and business needs. Take a look at the insurance options we offer and work with your Financial Advisor to help determine which one is right for you.

9. Real World Example Client Situation: On the following slides is a sample evaluation of a policy review that was performed for a client. In this scenario the client had previously purchased two VUL policies the rationale being that he would purchase one policy for each of his children and fund them as an alternative savings account and quasi estate planning strategy. On the surface this may appear to be a legitimate strategy but in reality it was not structured to maximize the benefits of this type of insurance policy and the client is rapidly losing ground in these policies due to the fact that his economic situation has changed precluding him from funding the policies. After a discussion with the client he informed us that due to growing business concerns his personal financial situation had changed and that it was his intention to no longer pay the premiums on these policies and he wanted to focus strictly on the death benefit and not the cash accumulation. His charge to us was simply to tell him what he should do.

10. Real World Example • Evaluation Process: • The first thing we did was to find out where he stood in regards to his current insurance situation. In order to determine that we requested in-force illustration scenarios from the issuing insurance company on the two policies in order to evaluate the clients current position. We asked the issuing insurance company to compile policy in-force data based upon the following assumptions; that no additional premiums would be paid on either policy and the in-force policy scenarios should reflect a 0% and 3% gross rate of return. • The in-force data shows that policy 1 will lapse at age 70 with the 0% gross return assumption and will lapse at age 78 at the 3% gross return assumption while policy 2 will lapse at age 64 with the 0% gross return assumption and will lapse at age 69 with the 3% gross return assumption. In effect the client has uncertain term life coverage at this point.

11. Real World Example • Conclusion: • Since cash accumulation was no longer a priority our position was to focus specifically on the two primary objectives for the client, no future premium payments and a guarantee of the death benefit for life. Our advice was to consolidate the cash value of the two policies and execute a tax free exchange of the combined cash value from the two VUL policies into a single policy and solve for a guaranteed death benefit for life. • The market survey to the left shows the carriers identified and considered for this policy exchange. The Lincoln National policy was chosen due to the higher death benefit on a guaranteed basis.