No. Insurance agents do not typically do annual reviews of life insurance policies. Annual statements are sent to the owners of the life insurance and it is generally up to them to identify any problems with the policy. Agents simply can't afford to do annual reviews because there isn't enough compensation tied to reviewing and servicing business. Also, traditional agents do not have access to the independent tools needed to properly review policies - they are given only what the insurance company provides, and these tools are unfortunately inadequate to properly analyze most policies.
Isn't my agent already doing a thorough review of my life insurance?
I have reviewed my annual statement on my policy. I pay my premium each year and the cash value is going up - how could I possibly have a problem with my policy?
What makes The Efficient Edge different from a traditional life insurance agent?
Life insurance is a complex financial instrument with many moving parts. Just because you have paid your premium and/or your cash value is increasing has very little bearing on the long term viability of your policy. The economy, interest rates, financial conditions of companies, investment portfolios, insurance company management decisions, product development, profit targets both at the company level and product level, and mortality costs are all factors that play a role in the success of your policy. Your policy is based on a set of assumptions. Illustrations which take current market conditions and projects them forward should not be used as a predictive tool because the assumptions will change and be impacted by all of the factors mentioned above. Assuming that in 10 years your policy will be performing the way it was the year it was issued, is like assuming that your investment account will perform the same way every year - and then being surprised when it doesn't. Insurance is affected by the same factors as any other asset, and it requires attention and management in order to optimize its performance.
The Efficient Edge has a different mindset, toolset, structure, and unique process. We create actuarial-based strategies that help the people we serve optimize return on capital invested in life insurance property. Our methodology, seeing life insurance as an asset -- a valuable piece of property that is a complex financial instrument which merits on-going management -- sets us apart.
This approach allows us to bring objectivity and transparency to the life insurance industry, which has unfortunately become a place where insurance is sold and re-sold, without any in depth evaluation of how the asset is truly performing.
We have tools that the traditional agent does not have access to and a depth of knowledge that most agents simply don't possess. For example, we have the ability to stochastically model polices to chart the probability of success, and we understand and have our own proprietary life expectancy data which helps us manage policies for maximum effectiveness.
Our structure is built on a fee-only platform and we live by the fiduciary standard of providing complete objectivity, transparency and full disclosure. Our unique process, The Efficient Edge Advantage™ incorporates all of our capabilities to bring valued outcomes to our clients. Part of our unique process also includes a due diligence process that families and advisors require of us as a fiduciary-based firm.
Unfortunately, two challenges occur when agents do "free" reviews. The first challenge is that agents only get paid when a new policy is sold. This can hamper their ability to provide a truly objective opinion about the value of your current policy vs. the value of a new policy. Second, the tools that agents will use for policy reviews are flawed due to the limitations placed on them by the insurance company that provides the data. Independent testing of a policy simply can't be done by accessing only data from the insurance company itself. Our process incorporates independent, actuarially sound data sets and computer simulation software that produces objective results for greater clarity and true value. We feel that most "free" reviews are actually a disguised attempt at replacing a perfectly fine policy.
My agent will do a review for free - why would I want to hire The Efficient Edge?
Isn't this just a sophisticated "review and replace" business?
Actually, our experience shows just the opposite result! 55% of the time we find that it is better to keep the current program based on the changes we recommend to optimize return on capital. 45% of the time there is a market alternative that should be implemented and only 5% there are no changes recommended. An overwhelming percentage of the policies we review are shown to be better than any new policy on the market. Our unique process, The Efficient Edge Advantage™, clearly identifies the impact of each option being considered on the desired result.
Do I really need this much documentation for a life insurance policy?
Unfortunately, the failure of a life insurance policy can have a devastating impact on a family, a business, or an estate. If you or someone you love is involved in a valuable life insurance policy - whether as the trustee or simply as the beneficiary - it is important to document all the decisions that went into the management of that policy. Increased policy failures due to lack of attention and management are resulting in a significant increase in lawsuits, and the loss of valuable death benefit proceeds when the family is most in need.
Do you sell insurance?
Unfortunately, the failure of a life insurance policy can have a devastating impact on a family, a business, or an estate. If you or someone you love is involved in a valuable life insurance policy - whether as the trustee or simply as the beneficiary - it is important to document all the decisions that went into the management of that policy. Increased policy failures due to lack of attention and management are resulting in a significant increase in lawsuits, and the loss of valuable death benefit proceeds when the family is most in need.
I have a great relationship with my agent - can I still work with The Efficient Edge?
Yes! Working with an agent can often speed up the data collection process, so it is often a helpful situation.
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