The life insurance industry made a big deal of the year 2000 and the impending monster changes in the term life insurance pricing that were just waiting for the ball to drop in Times Square. They even came up with a special name for the event, Triple X.
The whole country was caught up in it. Insurance companies were pushing the fire sale idea that “you’ll never see prices like this again, EVER”. Applications for the old rates were being hauled around home offices on pallets with fork lifts. Underwriting was being outsourced to try to keep up with the volume. It was nuts, then the clock struck midnight and…….term insurance prices kept right on going down for another 9 years. They’ve kind of leveled off now, but at historic lows.
During that time period the super competitive permanent life insurance product, the no lapse guarantee universal life, came on the scene. There was no cash value to muddy the waters or build large buildings. The death benefit was externally guaranteed just like term insurance. It was generally 1/2 to 1/3 the cost of cash value policies with comparable death benefits. It was affordable!!
And ultimately it has proven to be unsustainable at those prices. Let me be very clear about this. Policies that are in force at those prices are guaranteed and are not in trouble. I’ve ranted for years about non guaranteed UL products and their death spiral. That is not the case the NLG UL products. But the industry has reached a point where they realize they can’t afford to sell those permanent policies at that price any longer. The price increase is coming fast and it won’t be small
I know the skeptics are already saying this is another Triple X, but let me point something out. Be very quiet and listen. Do you hear any companies screaming and yelling to come buy these products because “you’ll never see prices like this again”? The answer is no. The prices are going up on this product. The prices are going up literally in the next few months industry wide. The companies don’t want to sell any more of the old priced product. Why? Because they’re not making a profit on it. You know what? If they aren’t making a profit and the product is fully guaranteed, well, that’s a winner for the consumer.
How good a deal is this guaranteed for life permanent product? It is so good that numerous companies have taken the unprecedented action of removing it from their conversion option portfolio. They simply can’t afford to take rock bottom priced term insurance and convert it to rock bottom priced permanent insurance. Several of these companies have replaced the lifetime guarantee with a universal life with a 10 year guarantee that literally costs more than a new life time guarantee product at the same rate class. They aren’t even offering life time guarantees at obscenely high prices for conversion. The don’t want people converting to it and they don’t want to sell it anymore at the prices that are in effect today.
Triple X? Not on your life. This is the real deal and if you snooze you will absolutely lose. Need a final expense policy that blows away any product being marketed as a final expense policy? Buy a $50,000 or $100,000 no lapse guarantee policy now. Estate planning? Buy the life insurance now and if you’re not sure how much, buy more and drop what you don’t need when the plan is finished. “But it has to go into a trust and the trust hasn’t been set up”. Tell your estate attorney to set a trust up now or you’re going to find a new estate planner. It’s template work folks. If they needed it for themselves they could bang one out in an afternoon.
Bottom line. No one is going to say I didn’t tell you. I am in touch with all of my clients annually anyway and am reaching out to all of them right now. These kind of opportunities are rare and can be extremely valuable to your family.