Every year I make a New Year’s resolution. It’s really more of a commitment to something I’m doing – and want to do more of – rather than something new. Most of the time, it feels like my have-to-do list is pretty full already. So I’m really not adding any new values to my life’s equation; I’m increasing the current ones.

We figure your have-to-do list and your clients’ have-to-do lists are probably pretty full too. So we thought it would be helpful to provide you with this list of 2020 Insurance Resolutions. These are not new ideas, but Re-Solutions that may help solve issues (or prevent them altogether) your clients can encounter without them.

1. Make sure the premiums are paid

Every year we work with your clients (and maybe even you) because a premium payment was late, forgotten, lost in the mail, or eaten by the dog. So one resolution is to set up automatic drafts for the policies. Monthly bank draft is the most common option and is available with just about every insurance company.

Most companies also allow bank draft for other payment options (like annual and quarterly). Our Policyholder Services Team is the best out there, and as helpful as duct tape, but your clients would probably prefer to work with them on getting a current illustration instead of reinstating a lapsed policy when bank draft premiums would have saved the day.

2. Check beneficiaries

Did a client get married? It may be time for a beneficiary change from parents to a spouse. Or divorced? Get that ex off the policy and give it to the kids.

If the kids are minors, we recommend not naming them as the policy’s beneficiary since the money can’t be paid directly to a minor. We’d look at other designs to ensure the insurance proceeds are available to use for the children’s care without delay.

If the beneficiary of a life insurance policy is a trust, it’s important to make sure the trust also has established a bank account (or the trustee has the power to do so). It can be very hard for a client who has just passed away to open a bank account.

We have a helpful advisor tool on our website to help you guide your clients toward policy reviews when life changes may affect their insurance needs.

3. Review disability insurance (DI) coverage

Many of your clients took out individual disability policies when they first signed on with you. And, hopefully, over time their income has grown. They may have group DI coverage from their employer too. Are they taking full advantage of their individual disability policies or do they need to supplement their group coverage with a personal policy? Things that can change include:

• Group disability often covers 50% or 60% of income, with a monthly cap of $10,000 per month. When they’re starting out, they’re under that cap. As their income increases, the benefits are increasing too. But have your high-income clients hit that cap; meaning that, despite their growing income, the group DI is staying the same? If so, the group benefits are then providing a decreasing percentage of income as income grows.
• Many group DI plans cover only base income/salary. If you have a client whose total annual income is based on significant bonus/commission/variable income, that amount may not be covered by the group plan, putting them at financial risk if they do become disabled.
• Does their individual DI policy have a future increase rider (a rider available with disability insurance policies that protects future earnings without medical underwriting, with increases based upon income and other disability insurance in force)? With policies through LLIS, when increase options are available to your clients, our Policyholder Services Team reaches out to them to be sure they don’t miss out on this valuable benefit.

It’s important they (or you or LLIS) are on top of these DI plans. A disability can be a financial catastrophe for many. Without income replacement, going to a $0 paycheck can devastate a financial plan. And even 60% of income while on claim can be troublesome. If your clients have DI coverage but have maxed out, an additional policy may be their best protection.

4. Get to know ALLiS

ALLiS is our anytime, anywhere access to LLIS. And it’s got some cool stuff online for advisors to use (and your clients too). You can see the status of clients currently in the application process, and you can:

• Run reports for existing clients
• Set your communication preferences

Hear our own Jenny Stiles (no voice-over actors here!) walk you through some of the things ALLiS has to offer. We celebrated ALLiS’s second birthday in October and she’s going strong!

Thank you for working with LLIS in 2019. We look forward to a new decade with you and we resolve to continue to put you and your clients first in all we do!