Hi, My name is Ed Hinerman. I haven’t been selling life insurance forever, but I have been around long enough to see radical changes in products available. I just want to share with you today what I consider to be one of the most troublesome leftovers from the last century. This problem will end up with owners of life insurance policies spending huge sums of money, only to have their policy fail in spite of having been assured at the time of sale that they were buying permanent coverage. BIG PROBLEM!!!!!
In a nutshell, permanent life insurance has cash value and by law has to be illustrated to show what is guaranteed and what is not. The problem is that 90+ percent of agents are so desperate to make a sale that they will emphasize what is not guaranteed (because it’s less expensive) and may or may not mention what the real guarantees of the policy entail.
The problem is that historically the non guaranteed illustration, also called the current illustration (because it reflects what is true at the moment the illustration is computed), fails to hold up. The policy collapses and all of the money paid in is lost. Unless you can arrange to pass away prior to this meltdown, you heirs will receive nothing from your life insurance policy.
There are products available today that can provide guaranteed policies at much lower costs than in the past. There is no good reason to buy a policy that is not guaranteed to be there when it is needed.
This post is somewhat dated. Life insurance underwriting is changing and evolving continually. For more updated information check out some of the key word links. If you have a specific question or topic you need information for do a search. If you don’t find the answers you need contact me and we’ll make sure you get the information that is important to you.