Universal Life Insurance Policy Purchase Checklist

Universal Life Policy Purchase Checklist

Universal life is a complicated product that contains interest, expense, and mortality risk.

The most common mistake we see with universal life pertains to interest rate fluctuations. The policy is often sold at a crediting rate that is higher than the carrier returns during the life of the contract. The policyholder ends up owning a policy that will lapse well before his or her death due to the contract being underfunded. This happens frequently, so make sure you clearly understand the assumptions your policy projections are based upon and the rationale behind projecting policy values at that rate.

The answers to the questions on this checklist will help you determine whether an indexed universal life policy will perform as projected and whether it will meet your needs.

Universal Life Policy Purchase Checklist

Use this form to log information regarding your prospective Universal Life Insurance Policy. After completing the forms, click the button below to complete your questionnaire. Your notes will automatically forward to the email address you've provided.

Carrier / Policy Name
AM Best Rating Bureau Carrier Rating
Rating Bureau Carrier Rating for AM Best
Comdex Rating Bureau Carrier Rating
Rating Bureau Carrier Rating for Comdex
ALIRT Rating Bureau Carrier Rating
Rating Bureau Carrier Rating for ALIRT
Is the carrier on any rating company’s watch list?
- Yes
- No
- Unsure
Is there any public information on the carrier that could affect future ratings?
- Yes
- No
- Unsure
What is the crediting rate illustrated?
Is there a minimum interest rate guarantee?
Did you receive an illustration at 1 percent below current crediting rate?
- Yes
- No
How is the crediting rate determined?
How often can the crediting rate change?
Does this policy contain a no-lapse guarantee?
- Yes
- No
If so, how long does the no-lapse guarantee last?
What happens to the no-lapse guarantee in the event of a missed premium?
Can missed premiums be made up to reinstate the no-lapse provision?
- Yes
- No
How can policy expenses change and how would you be notified?
How can mortality costs change and how would you be notified?

What are the riders illustrated?

Is the loan rate:
- Variable
- Fixed
How is the loan rate determined?
How long do surrender charges last?
Have you been provided with a financial profile on the carrier (such as ALIRT or VitalSigns)?
- Yes
- No
- Unsure on how to get this
Is there an “early cash value” (ECV) rider available?
- Yes
- No
If ECV is available, have you compared it to a non-ECV contract?
- Yes
- No
Did you follow the Life Insurance Underwriting Process Guideline Checklist?
- Yes
- No
- I've never heard of the "Underwriting Process Guideline" checklist.
Were you provided a final illustration that exactly matches the policy that was issued?
- Yes
- No
Have you verified that ownership and beneficiary designations are correct?
- Yes
- No
Has your agent committed to providing an in-force ledger at least every two years?
- Yes
- No
- Why is this important?
Are there carrier incentives tied to the sale of this policy?
- Yes
- No
Your Email*
Your Name
Prefix First Last Suffix
Are you interested in an additional policy review or do you have any questions regarding an assessment you have received?
- Yes
- Not at this time