When you find out that your most recent prospect already has a life insurance policy, it may seem as though another financial advisor has beaten you to the punch. But by reviewing that prospect’s coverage and reassessing his or her needs, you may be able to help that prospect adjust the coverage to meet his or her needs better or identify the need for additional insurance.

“In today’s marketplace, where a vast majority of policies are sold and never serviced,” says Jim Ruta, managing partner and vice president of global sales with InforcePRO in Mississauga, Ont., “life policy service is a great way to get in the door with new clients and prospects, and it’s a way to get business from your existing clients.”

A recent study by Connecticut-based global insurance association LIMRA International Inc. revealed that 62% of life insurance policyholders do not know exactly what life insurance they have or why they bought it in the first place. That finding highlights an opportunity for you to talk to clients about the coverage they have and the role it plays in their broader financial plan. Says Ruta: “The fact that so few advisors do reviews means that the opportunity to do this is extraordinary.”

There can be challenges associated with advising a client on a policy you didn’t sell. Even tracking down all of the contract details can be difficult if the client doesn’t have the original documents.”People aren’t terribly organized when it comes to keeping all of their stuff in one place,” says Helena Smeenk Pritchard, who provides life insurance sales coaching and training with Helena Smeenk Pritchard & Associates in London, Ont.

It’s very common for people to lose their insurance policy information, according to Michael Hartmann, CEO of FindYourPolicy.com and a former life insurance agent in Cooper City, Fla. He launched www.FindYourPolicy.com, a life insurance database that allows individuals to search for lost policies, after having trouble tracking down his father’s life insurance policy upon his death in 2007.

“I thought that as a life insurance agent, this would have to be easy; but it’s not,” Hartmann says, noting that there is no single industrywide database of life insurance policies in Canada or the U.S. “If you don’t know the company name, you’re totally lost.”

Even if your client does have the name of the company he or she is insured with, finding the details of the specific policy can be a time-consuming process if the client has lost the original contract – especially if it was issued many years ago. Furthermore, with all the industry consolidation over the years, some clients face the added challenge of trying to determine which company has since assumed responsibility for their policy.

You generally are in a better position than the average policyholder to track down this kind of information. For example, if you subscribe to InforcePRO’s software and policy-management tool, Ruta notes, you have access to a vast database that allows you to search for insurance policies dating back to 1972.

When contacting an insurance company for information on a policy, you may run into privacy issues. As a result, Smeenk Pritchard recommends having a conference call between you, the client and the insurance company. Have your client identify him- or herself and mention that you are on the line with permission to ask questions on your client’s behalf.

“Because of privacy of information legislation, the only way is to have the client on the phone giving verbal permission,” Smeenk Pritchard says.

Then, she continues, ask to speak with the person who is most informed about the specific product in question, and get as many details as possible: “The advisor needs to become the interpreter.”

Once you’ve uncovered the full scope of your client’s existing coverage, you can analyze it to determine whether it is still serving the intended purpose, as well as assess any conversion options or riders that might make sense for your client to exercise. Clients often are unaware these options exist, and educating them can establish the foundation for a trusted relationship.

By conducting an updated needs assessment, it may become apparent that your client could benefit from enhancing his or her coverage with additional life insurance or another type of coverage, such as critical illness or long-term care insurance.

Talking to your clients about their existing insurance coverage won’t always result in another sale right away. But such conversations can be an effective strategy to put the topic on clients’ radar and position yourself as the person to contact if your clients do have a need for more coverage in the future.

“If you can show me value in [the policy] I already have, I’ll likely be inclined to buy the next one from you,” Ruta says. “When you help more, you sell more.”

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