Insurance – Don’t Set It and Forget It

April 21, 2016  |  

Insurance – Don’t Set It and Forget It

Key Takeaways:

  • People change over time and so their insurance needs change too.
  • Insurance policy expenses and their underlying crediting rates can change over time
  • Periodic insurance policy reviews are critical.

Remember Ronco founder, Ron Popeil’s, signature tagline for his famous rotisserie oven– “Set it and forget it”?   That might be fine for cooking convenience, but when it comes to insurance, don’t just set it and forget it!  Here’s why.

The Questions

After almost 30 years in the wealth management profession, I don’t think I’ve come across more than a dozen people who could answer both of the following questions: (a) What is the name of your insurance advisor? and (b) when was the last time your insurance advisor reviewed your policies?

While I am very knowledgeable about most insurance products, I don’t sell insurance or consider myself an expert in this realm. So, I recently sat down with William J. Bradley III, CLU, ChFC for his take on the two key questions above. For the past 36 years, Bill has specialized in providing customized insurance solutions to his client’s unique circumstances.

According to Bill, four important considerations come to mind:

(1) Agent compensation. The insurance industry generally front loads compensation paid to the selling agent. Most life insurance policies have a Year-1 sales commission that is significantly larger than the commission earned for renewing the policy.  This dynamic unfortunately often results in less than ideal policyholder service.

(2) Unpleasantness of the topic. Clients tend to avoid discussing the topic of life insurance because it reminds them of the premiums they must pay, along with the recognition of their own mortality.

(3) Outdated business model. The older, traditional insurance products were historically illustrated and purchased assuming fairly predictable results. In other words, the policy’s values and performance didn’t change substantially from the initial sales illustration.

(4) Client outgrows agent. A client’s sophisticated financial situation and the original agent’s ability to meet those increasingly complex needs can be problematic. Simply put, clients often outgrow their agents.

The Importance of Ongoing Reviews

Prior to the 1980s, there were two basic types of life insurance—term and whole life. Term insurance featured an annual premium that increased every year with no cash accumulation. Whole life insurance had a fixed premium with a built in guaranteed cash value. The investment risk associated with a whole life policy was borne solely by the insurance company.

During the escalating interest rate environment of the 1980’s, the returns on whole life policies paled in comparison to market interest rates. Insurance companies responded to this challenge by introducing new forms of life insurance to make up the difference. With universal, variable, and other forms of similarly constructed life insurance, policy holders suddenly had the ability to decide how much to pay, when to pay, and where their cash value portion was invested. These policies came with higher earnings potential, but with limited guarantees. The policy holders now assumed the investment risk that was previously guaranteed by the insurers. With the introduction of variable premiums, variable investment returns, and the lack of guarantees, regular reviews and evaluations became critical.

Finally, improvements in the cost of insurance and added underwriting advantages for select candidates has significantly reduced the pricing of life insurance for many people, even those with older policies.

The Solution

Bill explained to me how he performs a policy review. He starts by understanding the client’s current situation and how it may have changed since the time the policy was originally purchased. He requests multiple in-force illustrations that project the long-term health of the policy over time under various scenarios. He then analyzes both the existing policy as well as newer, enhanced alternatives to determine options that best remediate existing problems and/or can potentially reduce premiums or increase benefits.


You wouldn’t ignore your investment plan, retirement plan or estate plan for 20 years, so why would you do so with your insurance plan? Insurance falls under the “risk management” portion of a comprehensive wealth management plan and is a cornerstone of our firm’s wealth management process. If you or someone close to you has an insurance policy that has not been reviewed in years, please give us a call (610.695.8070). We will be happy to make sure it’s the proper fit for your current situation and will suggest appropriate alternatives if it is not.


William J. Bradley III, CLU, ChFC

Click here to contact Bill

Since 1979, Bill has concentrated on providing sophisticated risk management advice to successful individuals and closely-held businesses throughout the country.

With an emphasis on the “total financial planning” requirements of his clientele, Bill’s practice has concentrated on the integration and coordination of a portfolio of insurance products (life, disability, annuities and long-term care) with the other key sectors of his client’s financial situation (i.e.) estate planning, investment/retirement planning, income and estate tax deferral/tax reduction strategies, and business succession/transfer planning (when applicable).

For over thirty-five years, Bill has advocated the “team approach” as the optimum method of serving his client’s needs. Whether contributing as an integral member of a group comprised of a client’s family, board of directors, attorney, accountant, bankers, investment professionals, brokers, etc., or acting as the “quarterback” of such a team, this philosophy has proven to enhance each advisor’s area of expertise, while at the same time maximizing the benefits received by the client and his/her family.

With a B.S. in Finance (Lehigh ’79), and dual professional designations from the American College, including a concentration in Advanced Estate Planning, Bill maintains a “cutting edge” practice to the benefit of his clientele. Over the years, he has spoken to numerous industry audiences, business associations and professional groups, as well as his business owner client’s top executives and work force.


1. Past performance is not indicative of any specific investment or future results. Views regarding the economy, securities markets or other specialized areas, like all predictors of future events, cannot be guaranteed to be accurate and may result in economic loss to the investor. 2.  Adviser does not render nor intends to render legal, tax or accounting advice.  Qualified and licensed professionals should be contacted for specifically-tailored advice in these areas. 3. Unless otherwise stated, Adviser does not endorse any professionals, vendors or products.


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About Mark Rioboli

Mark A. Rioboli, CFP®, CFS is Director of Wealth Management for Independence Advisors, bringing over 25 years of experience in the wealth management industry. Have a question for Mark? CLICK HERE TO ASK MARK

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