C3 Financial Partners

The Crucial Role of Life Insurance Policy Reviews for Affluent Clients

As legal, accounting, and financial advisors to high-net-worth and ultra-high-net-worth individuals, your role extends beyond traditional financial and estate planning.  It includes helping your clients safeguard their wealth, protect their assets, and ensure the well-being of their family members.  One powerful tool that often goes overlooked in this process is annually reviewing a client’s life insurance.  While life insurance policies are commonly obtained, the importance of regular policy reviews is often underestimated.  At C3 Financial Partners, our team of planning specialists recognize why conducting a life insurance policy review is essential and the potential risks of neglecting this critical aspect of financial planning.


There are numerous benefits to conducting a life insurance policy review.  Among the most important are the following:

Ensuring Adequate Coverage

As an affluent individual, your client’s financial situation may have evolved significantly since the inception of their life insurance policy.  A policy review allows you to evaluate whether the existing coverage aligns with their current needs, such as estate liquidity, business continuity and the care of loved ones.  What is often underestimated is the impact that inadequate coverage can have.  If there is not enough liquidity to pay estate taxes or to transition a business, any challenges could be amplified by having to sell illiquid assets, selling needed assets or selling assets in a ‘fire sale,’ any of which could leave beneficiaries vulnerable to financial hardships.

Identifying Cost-Effective Solutions 

Over time, life insurance products change, and new and improved features may become available.  By conducting regular policy reviews, you can identify cost-effective solutions, potentially saving your clients money while maintaining or enhancing coverage.  For example, many of the permanent life insurance solutions available today offer low-cost riders to address long-term care, chronic illness and disability expenses.  Also, due to the competitiveness of the market, some life insurance companies have lowered policy expenses and it may be possible to reduce premium payments or to increase coverage amounts at no additional cost.

Tax Efficiency

Life insurance policies can play a crucial role in estate planning, offering tax advantages when structured correctly.  A thorough policy review can help identify opportunities for optimizing tax efficiency and asset distribution upon your client’s passing.

Policy Performance Evaluation 

Life insurance policies may have investment and guaranteed components that affect their overall performance.  A policy review allows you to assess whether the policy is meeting its projected growth and whether adjustments are necessary to align with your client’s financial objectives.

Portfolio Positioning

Life insurance is often the largest misunderstood and unmanaged asset that someone owns.  Frequently, a policy is treated solely as a product awaiting use.  In reality, life insurance is an asset class and a cash value policy should be included in an investment portfolio.  Since life insurance has a high probability of a stable return, a policy can serve to balance a portfolio where there is investment in higher risk asset classes such as hedge funds and private equity*.

Life insurance is not a ‘set-it-and-forget-it’ solution and must be monitored so that changes can be made to maintain a policy’s effectiveness.  C3 Financial Partners can help evaluate if policy changes are needed and the options available to ensure continuity in any personal or business financial plan.


Just as there are benefits from annually reviewing a life insurance policy, there are risks if a policy goes unchecked.

Inadequate Coverage During Critical Life Events

An unexpected death, growth in a business, accumulation of wealth or the acquisition of substantial assets are common occurrences.  Failing to update life insurance coverage during these events can leave a client’s legacy exposed to adverse financial consequences.

Outdated Beneficiary Designations

Imagine if a client left their life insurance proceeds to a former spouse instead of a current one! This happens all the time because a policy’s beneficiary designation was not updated.  In a business setting, this could mean paying the wrong shareholder.  Neglecting to update beneficiary designations on life insurance policies can lead to unintended distributions, causing disputes and delays during the claims process.  Regular policy reviews ensure beneficiaries are accurately designated and reflect the client’s current wishes.

Lapsed Policies 

Affluent clients and businesses often have multiple life insurance policies, making it challenging to keep track of premium payments and policy details.  Failure to conduct regular reviews could result in unintentional policy lapses, leaving beneficiaries without the expected financial protection.

This is commonly the case with term policies which likely have a conversion/exchange option that must be exercised during a specific time window.  If exercised, a policyholder can convert/exchange to a permanent policy and continue coverage.  However, if the window to convert is missed, coverage is likely lost, and the decision of how to proceed is not made for, and not by, the client.

Inattention may lead to regret when it comes to life insurance.  A policy review by C3 Financial Partners shines the light on the smallest details so that the risk of policy lapses is lessened or eliminated, that sufficient coverage is in place to meet the policy’s purpose and make sure any death benefit proceeds are directed where they should be.


As legal, accounting and financial advisors to affluent individuals, it is vital to emphasize the importance of regular life insurance policy reviews.  These reviews provide an opportunity to evaluate coverage adequacy, explore cost-effective solutions, optimize tax efficiency, and address potential issues.  Neglecting policy reviews can expose your clients to financial risks, inadequate coverage, and missed opportunities.  By proactively conducting life insurance policy reviews, you can help your clients protect their wealth, secure their legacy, and ensure their loved one’s future financial well-being.

At C3 Financial Partners, we look forward to helping our clients gain clarity in their goals and objectives, confidence that they are making the right decisions, and providing coordination with their other advisors.

*Judas, J. C., & Fontanini, M. (2020). Life Insurance: A Valuable Contingent Asset Class? Trusts & Estates, 159(8), 34–38.


Securities offered through Valmark Securities, Inc. member FINRA, SIPC.   Investment advisory products and services offered through Valmark Advisers, Inc., an SEC Registered Investment Advisor.  Representatives may transact business, which includes offering products and services and/or responding to inquiries, only in state(s) in which they are properly registered and/or licensed.  C3 Financial Partners is a separate entity from Valmark Securities, Inc. and Valmark Advisers, Inc.

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