I would like nothing more than to be blogging today to humbly admit that I had cried wolf and that all of my screaming about non guaranteed life insurance teetering on the precipice was wrong, but……..

I spoke with a client looking for term insurance about an hour ago. It seems his New York Life variable universal life policy that was doing fine a year ago is going to take an additional $60,000 over his regular premium to keep in force for another year and no promises about the year after. For those who haven’t followed my rantings about cash value and especially non guaranteed cash value policies, VUL’s are probably the most egregious of the lot. They don’t even pretend to have any guarantees. It’s all about the investment portfolio embedded in the life insurance policy and if the investment blows up (and haven’t most of them?), the policy blows up with it.

He is kicking himself now as he recounted the agent telling him that “this is New York Life”, supposedly meaning that they are bombproof. Yah, right!!

The economic meltdown is kicking all kinds of cash value policies to death. I was talking to another agent today who was rescuing a client who has a whole life/term blend insurance policy. These policies have some whole life and the use dividends and premium to purchase yearly renewable term to make up the full face amount. The dividends have been slaughtered in the last six months and his premium has been increased from $54,000 a year to $68,000 a year because there isn’t sufficient support for the annual renewable term portion of the policy.

Bottom line. If you aren’t absolutely, 100% positive that this can’t happen to you, seek out an independent agent and have your insurance evaluated before you take it in the nose the way these guys did.

I remember in the Navy that we had so many fire drills that we tended to be a bit lax. In order to compensate for that, it there really was a fire, during the alarm they would announce that “This is not a drill”. People, this is not a drill. If you have permanent coverage that you know doesn’t have great guarantees or you’re not sure if it does, seek help. Don’t wait. Replace it with something solid before you’re left with no insurance and a bitter taste.