Data Visibility Plagues Insurance Industry

Renewal information is already a big problem in our industry. The fundamental issue is access to information. Financial advisors have a sworn duty (fiduciary duty) to make sure they are doing what is in the best interests of their clients. Combine this with the dynamic evolution of products from insurance companies and a perpetually changing tax code and you can see how diligent advisors must be to make sure their clients' needs are met and they fulfill this oath.

For the best advisors in the business, this means a proactive review of their insurance on a prescriptive schedule.

It's all about communication

Consumers today want access to all the information about the products they own especially when changing from one product to another (such as a term conversion). Companies like Amazon, Apple and Uber have all made transactions way too easy (case and point my Amazon bill every month). These companies also give customers access to all the information they need to make a purchase on their terms and timeline. Uber lets you know when your driver is coming, what vehicle he/she is driving, what rating he/she has all before you even accept the ride (I presented at Insurtech QC in April about this). As a result, consumers have been conditioned to expect this kind of proactive approach to their needs.

When doing a proper review of your clients' policies, one of the fundamental questions most clients are going to have will be, "Is this the most fiscally efficient and responsible use of funds?" It's probably your top goal anyway if your focus is to create more wealth and financial security for your clients.

To do a proper review, we need to do a bit of math to make sure their existing policy is the best product for their needs by calculating the cost of what they own compared to the current market options. However, if we don't have access to all the information about the policy, it's going to be hard to fulfill our fiduciary duty to the client.

How we do it today?

In the current environment, you could save a copy of the policy in a locked file cabinet, pull it out and manually enter that information into Excel in order to run calculations. Maybe you bought a block of business and don't have the original file. You could request the information from the carrier and they might send you a fax (if you still have one) but the time to which you may get this information may be limited and the clock may already be ticking if the client has got the dreaded renewal letter.

Insurance carriers generally say renewal information is calculated at the time the policy renews, normally giving 60 days warning via letter that looks like this:

actual life insurance renewal letter

Not the best client experience and it does not give the client the options or transparency they are looking for today.

Many consumers buy short-term products initially but if they never receive a review from their advisor, the advisor may have left the business or retired and sold the block of business. Clients who don't hear from an advisor in 10+ years get caught off guard when they receive a letter from the carrier such as the one above.

The compliance risk alone for advisors not reviewing what is in force makes me nervous for them. Due to the increase in compliance when an advisor wants to sell a new policy, they must fulfill a few compliance musts - Needs analysis, a reason why letter and suitability analysis. However, it becomes increasingly difficult to fulfill compliance requirements with hidden or hard to access data.

Life Design Analysis CEO, Barry Crowther, joined our team in 2016 coming from the medical space and says:

"It is astonishing to me how the Life Insurance industry as a whole is lagging behind most other industries in customer engagement.

Having worked the majority of my career in a different, but similarly highly regulated health and life sciences industry, I see significant opportunities to improve transparency and provide better communication of options to consumers.

In the health space, patients have become highly engaged in their health options and most do not simply rely on the advice of their health provider but also do their own research. Educating consumers on their options and notification on compliance with their medical treatments are baseline capabilities in today's world.

I have heard statements from some insurance advisors that their clients "buy what they tell them to" but in today's world this is far from the truth. Most consumers today do not blindly trust their advisors and do conduct their own research. Most consumers today want to understand their options and be educated on the pros and cons of various scenarios. Most consumers want transparency and not be surprised upon renewal. Most of all most consumers want and expect a higher level of customer engagement. Kudos to the many companies and advisors out there that have recognized this need and a wakeup call for those that haven't recognized this becoming table stakes."

A bigger liability looms with term policies that renew at YRT rates!

Recently, there has been a trend to have term policies renew at YRT rates which creates a new challenge in accessing in force policy data.

The problem is to properly review the policy, there is some fairly advanced math that needs to be done to ensure what they bought is still competitive with the current market options. This requires knowing the policy information and your client's timeframe.

With term insurance that renews on a traditional schedule to age 85, you might have 2-7 data points or renewals depending on the client's age. With a YRT renewal schedule, you might have 16-56. Anyone who has reviewed a universal life YRT contract and was sent a fax of a cost per thousand table from the insurance company when they requested the pricing information will know how time-consuming this can be.

The more data points, the more challenging the review and the less likely an advisor will perform a review creating situations like this doctor from BC experienced.

Let's look at a traditional Term 10 policy compared to a "Term 10" that renews at YRT rates.

YRT vs Term

As you can see, there is a lot more data points to properly calculate the cost of the existing policy vs. conversion options.


The best solution is to enter this information and store it in a client management system like Life Design Analysis that allows you to archive and leverage that information when you perform a review with a client. LDA is unique in that it lets you save renewal data and import it into a presentation that compares to what is available on the market through our integration with LifeGuide (ask about our exclusive discount for LifeGuide subscribers!) Start a free 30-day trial!

Advisors who use LDA long term already have a solution to this challenge by marking any policy they included in a presentation as sold when they complete a sale. This allows you to document and save the information on the policy.

To do this when you sell a policy simply click the edit button on the plan you sold. edit

Enter the policy number and issue date issue date

Select Save as a Policy save a policy

This saves the premium schedule and any values (even whole life projections) to the client file so you can access and leverage this information in any future presentation. Simply select +inforce and any saved policy data can be leveraged in future presentations. This is a great way to review projected whole life values vs actual performance.

import policy details

You can review the policy at any time quickly and accurately, even applying calculations like PV/FV or comparing IRR of various scenarios.

Watch this quick video to see how this works

Advisors equiped with the right tools protect their practice for the future and add new sales with our robust policy management tools.


Remember, reviews drive sales and enhance the value you provide to your clients. With LDA, you can review as frequently as you desire and receive automatic notifications based on critical policy milestones so if time is valuable to you and you are interested in being one of the 98% of LDA subscribers who report increasing efficiency, try LDA today!

Contact us for more information or to start your free trial!

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usage report

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