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Our Insurance Evaluation, Auditing and Acquisition Process

Life presents us with many wonderful opportunities, constant evolution and a whirlwind of change. Just when we feel like we've reached a period of normalcy, we are often again surprised by a new, unexpected twist or turn in the road. And through all of this, though we try to stay focused on the most positive desired outcome, we remember that we still must have a plan for the possibility that things may not go our way.

This statement is most evident when it comes to life insurance planning. Statistics tell us that we should live a long life, that we should make it to our "golden years", that we should live long enough to see our children's graduations, to dance at their weddings, and to hold our grandchildren. But we plan for the possibility that we won't.

A couple gets married; they purchase insurance. A child is born; they buy another policy. A home is purchased, a mortgage is taken out, and a new policy is purchased. A new business venture is started, life savings are invested, and yet another policy is purchased. Success is achieved, transfer and estate taxes loom, and still another policy is considered.

Along the way, the purchase of life insurance is clouded with questions: Did the agent that we used have the expertise to consider all of the ramifications of this decision? Were all of these "ad hoc" decisions ever comprehensively evaluated? Were the policy owners and beneficiaries properly chosen and do they match the provisions of my will? Should the policies have been owned by a trust? Was the entire marketplace considered, or did the "captive agent" that we met with just recommend the policies that his company sells? Did we buy enough coverage? Are we overpaying? Did we buy the right type, given our needs? Does this purchase reflect what we've done in the rest of our planning?

At Marciano Wealth Advisors, we believe that the purchase of life insurance is as serious an issue as constructing a properly balanced investment portfolio, and should require the same amount of thought and attention as constructing a legal document such as a will or a trust. When addressed properly, the purchase should provide satisfaction and relief, not anxiety. Finally, it should provide answers to problems, not create more doubt and questions.

Our Insurance Evaluation, Auditing and Acquisition Process is thorough and considerate of all of our client's needs; it is collaborative and includes the input of the client, their outside advisors, and their wealth advisor. It is extremely competitive as it includes an unbiased, mathematical evaluation that is not clouded by a "parent company's" influence. And it is clearly and patiently explained with a focus on education, and in a way that evokes questions and delivers answers.

At Marciano Wealth Advisors, our Insurance Auditing and Acquisition Process is as follows:

  • Detailed Data Gathering

Every relationship begins with dedicated meetings and conversations which allow us to understand our client and their goals. The data we seek is both quantitative and qualitative in nature, and directs us to precise goals that the client wishes to reach both during their lifetime and at death. For families, this conversation includes spouses and, at the discretion of our client, will sometimes include adult children. For closely held businesses it includes partners, and occasionally includes shareholders and key employees.

  • Recognition of a Capital Shortfall

Remembering that most often, life insurance is sought because it is recognized that if someone were to die unexpectedly, there would be a shortfall of capital that needs to be created immediately and in a tax preferred fashion, we evaluate the various scenarios in a client's life that could result in such a shortfall. Some of those possible occurrences are obvious, and others might be opportunities that were never considered by the client. Each need is carefully and thoroughly explained to the client so that the client may prioritize which needs will be addressed.

  • Financial Modeling

Often, certain needs will materialize but the scope and magnitude of them are not clear until the economic impact is modeled. To ensure that the impact of the insurance purchase is evaluated quantitatively and its impact is considered relative to other planning goals the client has, various methods are employed. Commonly utilized are either a financial planning software methodology, or at the very least, detailed spreadsheets are created, so that various scenarios can be depicted and considered.

Also being considered at this stage are the various funding sources for the purchase of the insurance, whether it be from cash flow, dividends from investment accounts, distributions from IRA accounts or through gifting.

Finally, the economic impact of the entity owning the policy is considered and discussed. If it is determined that a separate legal entity should own the policy, introducing legal professionals to the process to draft trusts might be considered.

During the following phases, this process will progress simultaneously so that if a product is obtained, the proper funding method and ownership method has been established and is ready to be implemented.

  • Product Evaluation

With absolutely no bias in the process, our planning department will search the marketplace for product vendors who specialize in providing the most economical solutions for the scenario in question. Recognizing that certain carriers offer more favorable products for certain ages, health risks, smoker status or desired product features, our team will streamline the search process for our clients and begin the process of aligning the insurance companies in our search to compete for your business.

  • Presentation of Possible Vendors

Meetings will take place to present to our client the host of suitable vendors that were the result of our initial query and that demonstrate their competitiveness to earn your business and consideration. A complete explanation with an open dialog will ensue so that every question is answered and the client feels comfortable moving forward.

  • Engaging in the Underwriting Process

Rather than "awarding" the business to one insurance carrier, and therefore eliminating their need to compete, medical information is obtained and delivered in a confidential fashion to the most competitive of the carriers presented so they may compete for your business. Often, medical exams, blood tests, and medical histories are required during this stage, and our team will oversee, coordinate and assist in this entire process. The end result is that simultaneously, many carriers are now working diligently to win your business by providing the most favorable underwriting classification possible. Throughout the process, Marciano Wealth Advisors acts as your advocate to procure the most competitive, favorable outcome.

  • Delivery of Underwriting Results

Once the competitive underwriting process is complete and underwriting classes have been determined by the carriers chosen, the results are outlined in a spreadsheet fashion so that they are clear and are able to be properly considered. Once the evaluation is concluded, our team will assist in obtaining proper signatures, final applications and documentation, and any change instructions, and deliver them to the chosen vendor.

  • Review, Packaging, and Delivery of Newly Issued Policy

The final, approved, policy is placed in force by the vendor and is delivered to our office where it is reviewed for accuracy and is prepared for delivery to our client. The client is given the final policy for review, and ample time is provided to discuss the process that has been taken and for questions to be answered.

  • Ongoing Review and Subsequent Audits

On an ongoing basis, the insurance purchased is reviewed and evaluated for its effectiveness and competitiveness. If it is discovered that a more competitive solution exists, our firm stands ready to revisit the analysis, audit the original decision, and begin a new evaluation and acquisition process.