My true desire is that in another 20 years the country will be purged of all of the fraudulently sold non guaranteed whole life and universal life policies.

There should have been some professional good cop/bad cop format in place to keep the disaster that has occurred from happening. The numbers I’m seeing suggest that prior to 2000, 60%-70% of all universal life policies were sold using the current or non guaranteed values as the driving sales tool. As opposed to the guaranteed side of the policy, the current side paints the best possible face on the product and it is usually sold by agents who say something like “This is a great company. They’ve performed great in the past and there is no reason to believe that they won’t in the future”.

In trying to make some sense of this in the past I have offered the two attached illustrations. These represent how universal life is normally sold (bad UL) and how, in my professional opinion it should be sold (good UL).

bad-ul

good-ul

The reason I feel so strongly about the difference between these two options is really two fold. First I think that most people believe universal life and whole life is supposed to stay in force forever without increases in premium, and it can (good UL). Secondly, it is a rare UL or whole life policy that performs as well as the current assumptions. In fact it’s been a long time since I’ve seen one.

Bottom line. If you need permanent insurance, don’t take your agent’s word alone for what the policy will do in the future. Make him or her show you the guaranteed side and follow that side all the way to the end. If it doesn’t have a death benefit at age 115 or 120 or wherever the illustrations stops, ask why not. If they try to give you some song and dance about the non guaranteed side holding the policy together, tell them you’re not interested unless you can hold the title to their house as collateral in case things don’t work out.

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