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Tools to evaluate life insurance policies for ILIT administrators and others

Kelley Rating (one asterisk = lowest, five asterisks = highest):

  • Ease of navigation, design of interface and learning curve *****
  • Instructional documentation and help system **
  • Carries out the goal of the product as advertised ****
  • Overall usefulness ****

Veralytic is a service to wealth advisors that provides research and analytics for measuring life insurance policy performance.  Comparing conventional life insurance policy illustrations may be inadequate to provide full information on a policy or to comply with the due diligence standards of the Uniform Prudent Investor Act.  The publisher of this service asserts that it provides analysis in greater depth that satisfies the standards. 

You furnish the details of the life insurance policy you want analyzed.  Veralytic then generates a detailed report evaluating the policy and makes it available to you through a secure area of their website.  The report is far more detailed than the typical life insurance illustration and uses graphs, stars and common financial terms to make the report more comprehensive than the typical life insurance illustration. 

A trustee has a duty to monitor and administer policy holdings.  However, the Prudent Investor Act also imposes a duty to investigate policy suitability and a duty to use the information available to manage trust owned life insurance in a manner that minimizes costs and maximizes benefits relative to acceptable risk. Veralytic  provides support for investigating suitability and other duties.  For further discussion of the UPIA duties of ILIT trustees, see Mayer, Fiduciary Duties for Trust Owned Life Insurance Under UPIA, 15 Lawyers Weekly (Jul. 2,2001), discussing the enhanced requirement for fiduciary review of life insurance policies under the UPIA and Warshaw, ILIT Trustees, Bridge Out Ahead…Lock in your Navigation System Now, 24 Probate & Property 1 (July/August 2010).

The purpose of each Veralytic Report is to provide a comprehensive, objective evaluation of a life insurance policy's suitability relative to comparable policies across the industry. According to the publisher, each Veralytic Report represents the equivalent of hundreds of manual comparison illustrations, assumingthat an agent had perfect access to perfectly consistent information from all major life insurance carriers in the United States.

What’s It All About?

Veralytic produces a report consisting of several measures of policy suitability in a graphical format, rating the policy with a star rating system that measures against five different categories of policy performance.  Custom reports are available through subscription or for purchase on a per-Report basis.  Asample report is available.  The Research area of the Veralytic website provides information on its star rating system and patents.

The Veralytic Report includes an executive summary, an analysis page, a corresponding illustration of hypothetical policy values, a user guide and a glossary.   The report is intended as a stand-alone document where suitability measures are shown on the analysis page, then summarized in the executive summary and further explained in the user guide and glossary.   A graphic analysis is supplied with the executive summary.

The reports furnished are designed to assist life insurance agents, brokers, trustees and other financial services professionals in helping their client prudently select and properly manage the appropriate policy.  The reports will:

  • identify underperforming assets, which may become a source of liability from lawsuits or regulation;
  • automate the process of comparing hypothetical illustrations for;
  • analyze how well a client’s current policies are performing;
  • estimate exactly how much a better-performing policy will pay in cost savings and higher earnings over the lifetime of a   policyholder;
  • provide consistent documentation of due diligence processes against future lawsuits; and
  • improve business process consistency across life insurance sales, quality control, documentation and risk management.

Veralytic Reports utilize a patented, proprietary five-star rating system that is fully disclosed in both the user guide and on the U.S. Patent Office web site. The analysis is a graphical one-page document, which measures costs, returns and overall suitability across five different areas. Reports are designed to be self-explanatory to any qualified life insurance professional and represent a significant savings in time and labor.  The Veralytic Benchmarks used for performance comparison are designed to reveal how competitively priced a product actually is and how much opportunity there is for improvement.  Each policy submitted is compared to its peer group.  The publisher states that its benchmarks for suitability are derived from a database of thousands of life insurance products and hundreds of life insurance companies.

Veralytic also furnishes a series of articles and case summaries on life insurance related subjects and industry news and a glossary of insurance industry terms in the Library area of its website.  In the Tools area, the Veralytic website makes available resources for compliance with the Uniform Prudent Investor Act, including guidelines for soliciting the best available rates and terms for life insurance products, a copy of the Uniform Prudent Investor Act, case law references for corporate or individual trustees of an ILIT with comments on steps that could have been taken to avoid a lawsuit and sample requests for illustration letters for variable life, universal life and whole life policies.  Veralytic subscribers are given access to additional tools, including guidelines, letters and grantor consent forms.

How it Works

After creating an account with Veralytic, you submit report requests and the information on the life insurance policy you are evaluating either to [email protected] or via toll-free confidential fax server at 1-800-409-3222.  A Veralytic Report Cover Page is furnished for submission and an inforce, or new business, illustration of hypothetical policy values for the policy under evaluation is required.  If Universal Life or Variable Universal Life is involved, the illustration must include detailed expense pages. If the policy is Whole Life, the illustration/submission must include the dividend interest crediting rate.  In either case, the objective is to submit one illustration that most closely corresponds to client expectations.  If detailed expense pages are not available, a copy of policy contract and the most recent annual statement will be required.  

After the report is generated, you’ll have access to a secure subscriber area displaying your reports.  The initial screen lists your active reports.  The report analysis page includes:

  • Product Profile – Product Rating (out of five stars), Product Type, Premium Type, Minimum Face Amount, Optimum Funding Strategy and Pricing Style as a function of Cost of Insurance Charges, Expenses and Earnings.
  • Policy expense breakdown and measurement against industry benchmark averages
  • Premium comparison against industry benchmark averages
  • Comparison of hypothetical cash value growth and coverage durations against industry benchmark averages
  • Disclosure of assumed policy crediting/earnings rates versus historical performance of invested assets underlying policy cash values

The executive summary then summarizes the findings from the analysis page and compiles the various measures into a star rating that considers each of the 5 major factors of product suitability (1 star for each suitability factor for a total possible 5 stars):

  • Financial Strength and Claims-Paying Ability
  • Cost Competitiveness
  • Pricing Stability
  • Relative Policy Value
  • Historical Performance

Veralytic works out the actual underlying costs of a policy, not just the premium.  It studies what the premium is actually based on, such as mortality improvements, and evaluates how realistic the hypothetical return in policy illustrations actually is.

What About Help and Support?

Navigation through the website is quite intuitive. A User Guide is available from the report screens explaining the operation of the report process.

Where Do You Get This Facility?

Veralytic is available from:


P.O. Box272358
Tampa, FL 33688


Email:  [email protected]

Pricing:  Access to Veralytic Reports, analytical services and special portfolio management tools is provided through member subscriptions.  Subscriptions are either Multi-user at $99 per month and $125 per report or Single-user at $199 per month for 12 months with unlimited reports.  More details on pricing are available at Subscription Services.

Bottom Line

Veralytic provides sellers, advisors and administrators of trust owned life insurance and other client life insurance with the analysis needed for comparison and evaluation of such policies and for compliance with trustee investment duties.

Trusts & Estates magazine is pleased to present the monthly Technology Review by Donald H. Kelley—a respected connoisseur of the software and Internet resources wealth management advisors use to further their practices.

Kelley is a lawyer living in Highlands Ranch, Colo., and is of counsel to the law firm of Kelley, Scritsmier & Byrne, P.C. of North Platte, Neb. He is the co-author of the Intuitive Estate Planner Software, (Thomson – West 2004). He has served on the governing boards of the American Bar Association Real Property Probate and Trust Section and the American College of Tax Counsel. He is a past regent and past chair of the Committee on Technology in the Practice of the American College of Trust and Estate Counsel.

Trusts & Estates has asked Kelley to provide his unvarnished opinions on the tech resources available in the practice today. His columns are edited for readability only. Send feedback and suggestions for articles directly to him at [email protected].


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