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What You Need to Know About Your Life Insurance Renewal


2 minute read

Revised April 12, 2023

When you receive your life insurance renewal, there are many things to take into consideration when making a final selection, besides just the cost. Here are three things that schools, cities, and counties should look for in their life insurance renewal.


Schools, cities, and counties are used to feeling the pinch of cash-strapped budgets and accounting for where every dollar goes. So, when you receive an increase on your life insurance renewal, you may be wondering why.

Life insurance carriers look at a group’s loss ratio and “experience” to determine your premium. Loss ratio is the ratio of total losses incurred in claims plus adjustment expenses divided by the total premiums earned. For example, if an insurance company pays $60 in claims for every $100 they collect in premium, then your organization’s loss ratio is 60%. “Experience” is essentially a statistical compilation relating losses to premiums.

Open claims is another item that may affect premium pricing. Employees who are currently disabled and are out on Life Waiver of Premium [1] are considered open claims by the carrier. They are expecting these pending claims to ‘close’ or pay out sooner rather than later.

Certain policy details within your plan may also be premium drivers. These include provisions such as covered retirees, no age reductions [2], or having an AD&D (Accidental Death and Dismemberment) rider. Making tweaks to these benefits could reduce your overall premium.


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Matching Your Employee Contracts

With every life insurance renewal, make sure that your employee contracts and policy are a match, and get your policy amended if any changes have occurred. Here are a few key questions to ask to avoid major gaps that could leave your organization exposed:

  • Have any changes been made recently due to negotiations?
  • If employees’ salaries are covered – have the salaries increased over the last year or two?
  • Does the contract provide continued life insurance coverage for employees during certain types of paid or unpaid leaves of absence?


Insurance Carrier Customer Service

Lastly, renewal time may be a good time to reflect on the insurance carrier’s customer service. Poor customer service may be a good reason for schools, cities and counties to consider shopping the market even if they receive a pass (ie: no premium increase) on their life insurance renewal. How was your last claims experience? Did you find it easy to reach a representative and get your concerns addressed? Were grieving families treated with respect?

Your agent/consultant is a great resource to help you understand how your group is priced and they can act as a liaison for you if you are having problems with the carrier.

For more information on life insurance or for a quote, contact your NIS Representative.


[1] Most Life Insurance policies have a Waiver of Premium provision whereby employees out of work due to a disability can have their life insurance premium payments waived until they come back to work.

[2] Age reduction is when the life insurance amount benefit reduces according to a graduated schedule when the insured reaches certain age milestones, usually 65 or 70.

National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.

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Erin Woulfe

Erin Woulfe

Erin Woulfe likes to write about things that matter. Keeping her finger on the pulse of what’s happening in the public sector world, she blogs about the latest legislative news and employee benefit trends that affect our school, city and county clients. She’s been with NIS since 2002. “I love connecting to our clients and providing them with the tools they need in order to administrate their plan,” says Erin. “Whether that be materials to educate their employees on certain benefits, how to effectively communicate change within an organization, or providing tips and how-to’s to help them make their job easier.”