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To ensure your clients’ expectations and financial needs are always being met, Churchley Financial Group provides objective analysis and ongoing monitoring and management of your clients’ in-force life insurance policies.
Often this involves reviewing and managing policies not originated by Churchley. Also, many policies we handle are held in trusts, so our services include close coordination with trustees as well as the policy insureds and owners.
Through our relationship with the Valmark Companies, we are able to offer one of the industry’s most comprehensive platforms of policy management services. This is accomplished through an effective combination of technology, a dedicated team of policy management experts, and a professional process developed from Valmark’s 55+ years of experience with sophisticated life insurance policies.
Ensures your clients’ life insurance policies perform as designed and continue to meet their needs
Mitigates the risk of policy lapse or underperformance
Resolves errors and prevents issues that can cause problems
Confirms premium payments and planned changes are made
Identifies opportunities to maximize the value of the polices
Provides automated trust administration and documented policy performance
Assurance of ongoing service by a trusted third party
The life insurance industry is constantly evolving; impacting new and existing coverage. In many incidences, this has led to some policies not performing as originally intended, creating a mismatch between your clients’ expectations of their policy and their policy’s results. Additionally, policyholders’ needs, and objectives can change after the policy is initially designed. Additional risks affecting policy performance are listed below.
Guaranteed products need to be continually monitored and managed. The slightest deviation from the policy plan can cause a guarantee to go off track.
SITUATION: A 50-year-old entrepreneur purchased a $2 million Guaranteed Universal Life policy with an annual premium of $50,000 and a lifetime guarantee.
CHALLENGE: In Year 2, the premium was two weeks overdue, and the entrepreneur received a termination notice from the carrier giving him the option to pay $50,000 and receive a one-year guarantee or pay $145,000 for a lifetime guarantee.
Upon investigation, the advisor learned that the late payment had automatically caused a rate change that would have cost the entrepreneur $95,000 to reinstate the lifetime guarantee
RESOLUTION: The Policy Management Company was called in and was able to leverage its relationship with the carrier to reinstate the lifetime guarantee without additional premium. Of note, had the policy been originally supervised by The Policy Management Company, this situation could have been avoided due to proactive services such as premium alerts and advance notices.
Over time, sustained low interest rates can significantly affect the performance and guarantees of many different types of insurance policies..
SITUATION: A recently-retired, 65-year-old corporate executive purchased a $3 million Universal Life policy for a single premium payment of $850,000. The original policy was projected to sustain the death benefit to age 100 based on the current interest rates.
The client, who is now 85 years old, was notified that his policy is projected to lapse at age 89 due to the sustained low interest rate environment.
CHALLENGE: The carrier gave the client the choice of paying an annual premium of $129,079 to extend coverage to age 95, or $173,338 per year to extend coverage to age 100.
TAKE AWAY: This particular product design has the greatest risk of lapsing early due to the current low interest rate environment. If the policy would have been monitored more closely over the years, early intervention could have significantly reduced the amount of premium required to maintain coverage until age 100.
CHURCHLEY FINANCIAL GROUP LLC
3000 Lawrence Street
Denver, CO 80205
T: 303.468.2100
SECURITIES OFFERED THROUGH VALMARK SECURITIES, INC. MEMBER FINRA, SIPC. INVESTMENT ADVISORY SERVICES OFFERED THROUGH VALMARK ADVISERS, INC. A SEC REGISTERED INVESTMENT ADVISOR, 130 SPRINGSIDE DRIVE, AKRON, OHIO 44333. 1-800-765-5201. CHURCHLEY FINANCIAL GROUP, LLC IS A SEPARATE ENTITY FROM VALMARK SECURITIES, INC. AND VALMARK ADVISERS, INC.
ANY TAX ADVICE CONTAINED HEREIN IS OF A GENERAL NATURE AND IS NOT INTENDED FOR PUBLIC DISSEMINATION. FURTHER, YOU SHOULD SEEK SPECIFIC TAX ADVICE FROM YOUR TAX PROFESSIONAL BEFORE PURSUING ANY IDEA CONTEMPLATED HEREIN. THIS ADVICE IS BEING PROVIDED SOLELY AS AN INCIDENTAL SERVICE TO OUR BUSINESS AS INSURANCE PROFESSIONALS.