An article written by Proformex Founder and President Mike Pepe was featured in the September/October 2018 issue of the Probate Law Journal of Ohio. His article, titled “Proactive Life Insurance Policy Management Mitigates Risk for Fiduciaries”, can be found on pages 300-301. The full-length article reads as follows:

PROACTIVE LIFE INSURANCE POLICY MANAGEMENT MITIGATES RISK FOR FIDUCIARIES

Fiduciaries have long struggled with the challenges of monitoring the performance of their inforce life insurance policies. It’s a process that can be overly complicated, time consuming, and costly. The result? Fiduciaries are often forced to be reactive, instead of proactive, in managing their policies, discovering too late that these policies are not performing as intended. For fiduciaries, the stakes are high—when factors like cost, premium timing fluctuations and crediting rate adjustments are unmonitored, changes inside a contract can have serious consequences for fiduciaries. These include such changes as premium modifications, death benefit changes, coverage length adjustments, liability concerns and client dissatisfaction. To overcome these challenges, many fiduciaries are turning to technology tools that can proactively monitor, manage and track client life insurance policies, ensuring that they’re performing as intended and are protecting their businesses from unforeseen risk. Such platforms empower fiduciaries with critical information about their policies before it’s too late.

WHY PROACTIVE LIFE INSURANCE POLICY MANAGEMENT IS A MUST-HAVE

While policy owners expect their insurance contracts to be proactively managed, fiduciaries often lack the tools and support for long-term monitoring and management commitments. As a result, these policies can be subject to such risks as lapse, degradation and asset erosion. With so much room for error, fiduciaries are at a much greater risk for potential liability for the decisions they make regarding their clients’ policies. Clients can file lawsuits against their fiduciaries when errors are made, as demonstrated in cases such as Bresler v. Wilmington in which the plaintiff was awarded $23 million in damages for the trustee’s failure to continue paying premiums on the trust (resulting in policy lapse) and overfunding the trust’s life insurance policies. The bottom line? Fiduciaries need a way to manage life insurance policies, both individually and comprehensively, to ensure they’re performing as intended. Staying on top of policy performance is critical to maintaining confidence in their fiduciary-client relationship.

BENEFITS OF PROACTIVE LIFE INSURANCE POLICY MANAGEMENT

Proactive policy management solutions create big benefits for fiduciaries, turning potential liability into a competitive advantage. They put the power in a fiduciary’s hands to reduce risk, improve practice management and deliver more value to clients. Technology solutions like Proformex make ongoing management of life insurance policies easy for fiduciaries, ensuring that policies are given the attention they need before it’s too late. Fiduciaries are empowered with the support necessary to streamline irrevocable life trust (ILIT) management responsibilities and consolidate individual policy data for powerful insight and analytics. Proactive life insurance policy management platforms are a way for fiduciaries to simplify the complexities of ongoing policy management, putting technology to work for better portfolio oversight and control.

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