The Annual Policy Review
Key Takeaways
Review coverage when needs change and periodically by agreement; do not promise a retention or referral percentage.
Check beneficiaries, affordability, policy debt, benefit changes and any expiring term or conversion privileges.
For cash-value coverage, review current values and guarantees; additional insurance is appropriate only when supported by the client's needs.
Reviewing an Existing Policy
Client Question: "Do I need to review this every year?"
Agree on a review schedule and invite updates when family, work or financial circumstances change. An annual review can be a useful service practice; it is not a promise of a particular retention rate or a requirement to buy more coverage.
| Area | What to check |
|---|---|
| Life changes | Dependents, marriage, divorce, mortgage, employment and retirement |
| Coverage need | Remaining obligations, duration, existing resources and affordability |
| Policy records | Owner, insured, beneficiary, contact and payment information |
| Term coverage | Expiration, renewal pricing, conversion deadlines and contract limits |
| Cash-value coverage | Annual statement, loans, charges, guarantees and current in-force illustration |
| Preferences | Desired future contacts and whether a review is wanted now |
Possible Results
The appropriate outcome may be to keep the policy unchanged, correct records, adjust funding, explore a suitable change, or seek professional advice. Do not assume a life event creates a coverage gap before calculating the need. Review alternatives and replacement consequences before recommending a new contract.
An unchanged need is a valid outcome. Referrals are optional and should never be presented as the price of receiving service.
Sources: NAIC life insurance buyer guide and Wisconsin OCI universal-life alert.
The Changed Circumstances
A client whose life has changed significantly
Setup
You're doing an annual review with a client you placed a $300,000 policy with two years ago. Since then, they've had twins and bought a house.
Client says:
“Wow, has it been a year already? A lot has changed—we had twins in March and just closed on our first house last month. It's been crazy!”
Practice Objectives
- 1Celebrate their life changes with them
- 2Explore how these changes affect their protection needs
- 3Discuss additional coverage without being pushy
- 4Calculate whether a gap exists before proposing additional coverage
- 5Recommend appropriate additional protection
Nothing Has Changed
A client with no significant life changes
Setup
Annual review with a client whose situation hasn't changed. No new coverage is needed.
Client says:
“Things are pretty much the same as last year. Same job, same house, kids are a year older but nothing major. Is there anything we need to do?”
Practice Objectives
- 1Confirm their coverage is still appropriate
- 2Update any contact or beneficiary information
- 3Discuss anything coming up (kids graduating, retirement)
- 4Remind them of your value and availability
- 5Ask for referrals since they're happy
The Disengaged Client
A client who seems annoyed by the review
Setup
You're calling for an annual review but the client seems bothered by the call. They're giving short answers.
Client says:
“*Sounds distracted* Annual review? Look, I'm pretty busy. Everything's fine with the policy, right? I'm still paying the premiums. Is there a problem?”
Practice Objectives
- 1Respect their time and willingness to continue; end the call if requested
- 2Quickly confirm nothing needs attention
- 3Offer to do the review at a better time
- 4Ask if there's a reason for their disengagement
- 5Leave the door open for future contact
Review Turns to Referral
A happy client during annual review
Setup
The annual review is going well. The client mentions several friends going through similar life stages.
Client says:
“You know, it's funny—a few of my coworkers just had babies too. We joke about being in the "new parent club." I bet most of them don't have life insurance either.”
Practice Objectives
- 1Recognize the referral opportunity
- 2Ask specifically about these coworkers
- 3Offer to be a resource for them
- 4Offer to share your contact details or arrange an introduction if the other person welcomes it
- 5Thank them for thinking of you
During an annual review, a client says everything is the same. You should:
End the call quickly since there's nothing to do
Confirm records, policy funding and beneficiaries, and respect their preferences about optional introductions
Suggest increasing coverage anyway
Schedule another review in a year