CLEAR: Confidential Life Insurance Evaluation and Recommendation

Suitability

New Coverage – Assessing and Documenting Needs & Suitability


"Suitability" must be the watchword not only for you but for every 21st century financial advisor.

Having a process in place that reliably documents suitability provides a clear advantage in the marketplace. In addition to the CLEAR Underwriting and Mortality Analysis, product and carrier suitability is key to both a successful client engagement and compliance with the myriad fiduciary regulations that surround your business.

Once you have established a living, documented need analysis, it is critical to also determine the suitability of your carrier and product recommendations. And just as evolving needs create new opportunities in the years to come, so does a change in product fit.

The CLEAR Life Insurance Design Questionnaire (LIDQ) is an ideal way to do this for the best interests of both your client and your practice.  It is also an excellent tool to help illustrate products appropriately based on the information gathered in the questionnaire. ***Note: this form is not a replacement for any required Life Insurance Company forms***

A Policy Purpose Statement serves as an excellent closing step in establishing a clear alignment between the client's goals and preferences, and the features and benefits of any agreed upon product purchases or courses of action.  A sample Policy Purpose Statement is provided for your review.

Additional Resources

Lincoln Financial Group - Life Suitability, Best Interest and Summary Disclosure Form

New York State Department of Financial Services Regulation 187 - Suitability in Life Insurance and Annuity Transactions

AALU  Commentary on NYSDFS Guidance on Regulation 187 - What Producers Need to Know

Lincoln Financial Group - New York DFS Regulation 187 Overview

National Association of Insurance Commissioners - Draft of Suitability in Annuity Transactions Model Regulation

Veralytic - Life Insurance Product Suitability