PFM Life Insurance Policy Audit Service
Monitoring a life insurance policy is the only way to ensure it pays as intended.
Sometimes policies implode. How do we know that?
Tenure. Prowell Financial Management (PFM) has been in the financial planning industry for over 25 years. During that time we have developed long-standing relationships with some of the largest family-run businesses in the nation. A critical aspect of the planning process has been insurance coverage; we are proud to say we have assisted these families in acquiring over $1 billion in life insurance coverage.
Experience. It is common in the life insurance industry for agents to abandon clients once contracts are issued. We know that as conditions change, premiums can become delinquent due to lost or misapplied premium payments, loans against the policy, or late or missed payments. What seems an insignificant oversight can result in years of lost coverage, or even policy cancellation. To make matters worse, we've found that contract provisions aren't always fully explained or understood and don't work the way the owner assumes it will. We have made it our policy to monitor our clients' life insurance contracts regularly. Out of this practice surfaced the realization that many policyholders would benefit from our review.
What do we do in an Audit?
We collect information directly from the policy issuer to evaluate each contract's terms and premium payment history. We then analyze the volatility of values and determine future premium requirements or other options. We present this information in an easy-to-understand format and explain all the implications of the current situation.
To learn more about our Life Insurance Audit Service, please call us at 484.359.4057. An audit is a simple tool to to provide assurance that your plan is functioning properly. We will be happy to send you some information about our Life Audit Service.
Case Studies: Problems PFM uncovered in Insurance Audits:
A client thought his Universal Life policy was fully paid up, but because the actual interest rate fell short of the 10% rate projection, he needed more than $200,000 in additional premium to continue the policy as planned.
You're a great planner and make your payments on time, sometimes early. You would think all is good, right? But it's not! A client made several payments to a Guaranteed Universal Life Policy before the premium due dates. Strangely, the premiums were misapplied as extra payments, and not as premiums—which would have led to a premature lapse if not discovered.
Mis-Statement of Age
A paid death benefit from a Universal Life contract was several hundred thousand dollars less than the client expected. We discovered that upon receiving the death certificate, the insurance company determined our client was actually a year older than indicated on the application. Using the “misstatement of age” language in the contract, they decreased the death claim to make up for what would otherwise have been paid in premium. However, within this type of contract, age is not a factor—the full death benefit should have been paid. PFM challenged the insurance company's actuarial and legal departments and discovered they had erroneously duplicated contract language (from standard whole life and term contacts) that isn't applicable to Universal Life contracts. They admitted their error and paid the full benefit.