Life Insurance Financial Evaluations, LLC
Life Insurance Policy, Portfolio, Program Management


   
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 Program Management Plan Development

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What is it?

Developing a Program Management Plan includes gathering all information needed to successfully initiate, execute, and complete a life insurance plan, whether for a single policy or multiple policies.  Program management focuses on continuous improvement.  A well-crafted Program Management Plan includes items such as project background, project scope (requirements, constraints, and assumptions), plan and policy design summary details, constraints, critical success factors, stakeholders, project schedules for policy management activities including performance measurements and risk assessments, roles and responsibilities, integrated change control procedures, and all other relevant information.  The Program Management Plan also describes the baseline expectations (budget, coverage amount, coverage duration, growth potential, charges and fees) against which future performance measurements will be compared.  A Program Management Plan will be created based off of years of experience and lessons learned from other life insurance plans.

Why it is Important?

Insurance products are not “set and forget” solutions.  They require proactive management to achieve the intended benefits.  A Program Management Plan can assist with documentation, communication, scheduling, and change management.  A Program Management Plan helps stakeholders and plan sponsors understand their responsibilities for certain activities and project milestones.  When a Program Management Plan is missing, critical activities may not be conducted in a timely fashion, such as conducting performance assessments that identify plan variances and identifies preventative or corrective actions.  If not performed, it may become too expensive to efficiently make needed modifications to the plan.

How do we do it?

Life Insurance Financial Evaluations, LLC develops a comprehensive Program Management Plan incorporating industry expertise from financial planning, life insurance planning, and project management skills.  The Program Manager may also conduct interviews of key stakeholders or assemble user working groups to identify key goals and objectives, policy information, illustrations, critical success factors, and other pertinent project information.

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 Risk Managment Plan Development
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What is it?

Developing a Risk Management Plan includes identifying risks and planning risk responses, and conducting an initial risk assessment.  The Risk Management Plan ensures that risk assessments are performed throughout the life of the policy; and it involves identifying potential risks, evaluating them, quantifying them, and subsequently determining a plan to handle them. Risks can be either positive or negative.  After risks are identified, assessed, and prioritized, the risk responses can then be planned and assigned to various team members or stakeholders.  A Risk Management Plan can be a stand-alone document, or it can be incorporated into the Policy Management Plan. 

Why it is Important?

A risk is an uncertain event or condition that, if it occurs, will have an effect on at least one objective.  For positive risks, the usual goal is to enhance or exploit these opportunities.  For negative risks, the goal is usually to mitigate the threat or impact to the policy.  Negative risks can lead to policy underperformance or even policy lapse, which may result in unforeseen and unwelcome tax consequences. 

The Risk Management Plan includes an initial risk assessment, which identifies issues and risks that may impact the long term success of the plan. Risks are highest at the start of a project, since estimates and projections are based largely on assumptions.  Assumptions equal risk.  The Risk Management Plan can help ensure the expected benefits and outcomes of a life insurance policy are achieved.  It has been estimated that approximately 80% of universal life insurance policies are lapsed or surrendered prior to mortality.  The Risk Management Plan can help ensure the expected benefits of a life insruance plan are achieved.

How do we do it?

Life Insurance Financial Evaluations, LLC develops a Risk Management Plan by incorporating industry expertise from financial planning, life insurance planning, and project management skills.  The Program Manager may conduct interviews of key stakeholders or assemble user working groups to identify areas of issues and risks, and work with the team to develop planned responses and mitigation strategies.

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 Program and Risk Management Oversight
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What is it?

Oversight includes the overall day-to-day plan management according to the Program Management Plan.  Proactive oversight ensures that the scope, schedule, and cost are maintained.  Oversight includes periodic activities such as reviewing policy statements, monitoring policy crediting rates, monitoring third party ratings, monitoring risk triggers, ensuring that premiums are paid and credited accurately to the policy, and ensuring that critical actions are taken.  Project stakeholders may have differing goals which can create conflict.  Project managers can determine the wants, needs, and expectations of the stakeholders and manage those desires and expectations.

Why it is Important?

Proactive policy oversight helps ensure that actions are taken to efficiently and effectively managing the life insurance policy.  Plan sponsors often have other priorities and mistakenly believe that the selling agent or trustee will be proactive and manage the policy.  An agent's main priority is usually selling new business, while trustees may not have the experience or in the case of corporate trustees, the sophistication to properly manage life insurance contracts.  For example, one of the largest trust companies only reviews carrier ratings, asset allocations, and whether the policy is projected to be inforce for five years to determine if the policy is in “good standing”.  By having a dedicated policy manager who manages the plan according to the Program Management Plan, plan sponsors and stakeholders can be assured that key monitoring and controlling activities are conducted and the various stakeholders are held accountable for their responsibilities.  Independent and dedicated policy oversight also helps to prevent fraud, by ensuring premiums are properly credited to the policy and statements are reviewed.

How do we do it?

LIFE, LLC Program Managers oversee the project based on the Program Management Plan.  Based upon the agreed upon activities and schedule, Program Managers periodically monitor the policy performance by reviewing statements, monitoring industry activities, monitoring carrier ratings, etc.  Program Managers also ensure that financial modeling activities are conducted when scheduled and that appropriate assumptions are made and that calculations are accurate.