It’s one of those days when I wish I could turn back the clock 30 years and use rectal explosive devices on all of the life insurance executives and life insurance agents who sold universal life insurance misled customers either with no explanation of the guarantees or the old, “the guarantees are the worst case scenario and our company has never done as poorly as the guarantees in our 300 years in business. I think if we could have nipped the problem in the bud at the very beginning of life insurance agents and companies making the presentation and sales of universal life all about the assumptions and big cash values, hundreds of thousands, if not millions of people would not have lost their financial rear ends and their life insurance needlessly. I also believe that preemptive strike would have made companies think twice about reviving the whole scenario with indexed universal life.
It is absolutely criminal that life insurance agents and companies aren’t being required to admit their knowing active participation in fleecing all of those customers, lying their way to large personal incomes while swinging a wrecking ball into their client’s financial houses. The successful agents of the dark decades of cash value universal life products have either retired wealthy or are still making unseemly amounts of money by making people believe that the products they sold were at worst, a great way to buy permanent life insurance and make money doing it, or at best the complete and total answer to every possible life insurance and retirement question you could ever ask.
I suppose the buck really stops with the National Association of Insurance Commissioners, the NAIC, who regulate products on the front end and handle consumer complaints on the back end. They, the 52 insurance commissioners (DC and Puerto Rico), know and have known how bad this problem is, or they are all stupid. They could have, by making product and universal life ethics training mandatory and misrepresentation of policy assumptions and guarantees criminal and harshly punishable, have stopped this before anyone was hurt. But the life insurance lobby had visions of Million dollar signs in their eyes and have used plenty of the inordinate profits that come from selling overpriced products that, by design, almost never pay a death benefit, to insure that no one makes them uncomfortable while they rape and pillage. The slaughter continues with indexed universal life.
Bottom line. This will continue to be a huge financial windfall for life insurance companies and a huge financial disaster for customers until those responsible quit looking the other way. No new bureaucracy is needed. No new funding. Insurance commissioners just need to do a 180 and quit passively participating in the crime. If you have questions or need help getting out of an imploding universal life insurance policy, call or email me directly. My name is Ed Hinerman. Let’s talk.