A Look Back Two! Universal Life In Perspective

It’s an interesting view from here. I’m not sure what the equivalent would be for someone who doesn’t write almost daily for years. Maybe just looking back at pictures of how you’ve changed? I’ve picked out half a dozen blog posts from the beginnings over 5 years ago. One thing has remained the same. I am as passionate today about life insurance agents who put their own bank account ahead of what is best for their client. Life insurance clients aren’t always right, but they are always what the transaction is all about.

In 2007 I wrote, “With literally hundreds of thousand of life insurance policies at risk out there, I just can’t emphasize enough the danger of not reviewing your coverage. This is an agent caused problem, so I believe the prudent direction would be to have your universal life policy reviewed by an agent other than the one who wrote the original policy. The original agent often has a vested interest in you not knowing the facts.”

I know that’s cold, but not anywhere near as cold as talking someone into spending money that you know they have a great chance of losing, or at least no guarantee at all of keeping. It’s nowhere near as cold as telling someone they have a permanent life insurance policy and having it go belly in 10 years or 20 years or, god forbid, a few years before your family needed it.

“To recap, many universal life insurance quotes were originally provided, much like adjustable rate mortgages, with little or no discussion of what happens if things start going in the wrong direction.
Millions of people are losing their homes because the mortgage broker took the path of least resistance and showed his customer the cheapest way to get in the door. I wonder if he or she is around now to hold that door open as they leave their American dream behind.” The housing bubble just had a slight aneurism back then compared to what the next five years did to our country. I found it interesting in a post I wrote in 2009 that I linked to a Reuter’s article that would seem to fly in the face of Mitt Romney’s assertion that 92% of jobs lost during the recession were women.

But the aneurism had already burst for traditional universal life insurance policies. “Hundreds of thousands of universal life policies will have their prices skyrocket to unaffordable levels in the near future all because an agent took the path of least resistance and showed his or her client the cheapest way to get in the permanent life insurance door.” Five years ago that was a gross understatement. I was on the blog scene and I really think I was trying to get in the door without ruffling too many feathers. In retrospect the feathers didn’t need ruffled. They needed plucked. I went on to say, “If that agent is still in business, they should have to sit down with your family and explain why they didn’t show you the guaranteed option and offer you a choice of a product that wouldn’t self destruct.”

Most of those agents aren’t still around. The life insurance industry was in a feeding frenzy for a couple of decades and fueled that frenzy with a non stop flood of new agents. They promised them the big bucks and easy sales. Those new agents went out and made the easy sales, the you’re gonna get rich without even trying, just look at the non guaranteed side of this illustration sale. They didn’t know any better and woe to the people that believed those new agents because they didn’t know that 95% of us never make it a year as life insurance agents. New agents are very often not even aware that they are giving horrible advice and leading clients down a path of destruction with their policies, and they won’t be around to help you sort it out after the fact.

Bottom line. The problem with traditional universal life policies that were sold on a non guaranteed basis has escalated just like the economic meltdown that has now taken away tens of millions of homes. If our country and government ever figure out how to turn the country around toward a fiscally sound nation again, unfortunately the problem with non guaranteed life insurance will not be on their wagon of fixes. If you have any questions or would like someone to analyze the health of your permanent policy’s future, call or email me direction. Let’s talk.