This is a point that probably can never be driven home enough to get everyone’s attention, but listen…..No matter what your life insurance agent told you about your universal life policy staying in force as long as you pay the premiums…..No matter what kind of promises the agent made, get your insurance company to send you a current in force illustration showing what is guaranteed, not projected or assumed, but GUARANTEED!!
I spoke with a man in Kansas today and we reviewed his two universal life policies. He said he was pretty sure he was in good shape, because the agent told him the policies would stay in force until his age 95. He is 61 now and has been paying on these policies for about 15 years. He happened to have an in force illustration, but admitted that he had filed it, not really understanding what it meant. He really wasn’t worried about what it said, because his agent told him it was good to age 95.
He pulled out the illustrations. They showed that best case, both policies will collapse in 2020, 13 years from now, his age 74. More than likely well before he will need the insurance, it will be gone, a victim of it’s own cash eating self.
And that was the best case. On the guaranteed side of the policy it will only last another 3 years. Either way he is going to lose his insurance and all the money that he put into it.
I hate to be like this about people in my own industry, but folks there are some scum sucking bottom feeders out there that really don’t care what happens to you, your family or your money as long as they make the sale. I’ve said this before, and I’ve never had anyone step forward and refute it. I believe that the majority of universal life policies in force today are underfunded and doomed to fail.
Bottom line. Don’t ever buy a life insurance policy from anyone without being shown the guarantees. Demand it. Don’t write a check without it. If you’re not sure you’re really seeing guarantees, get a second opinion. If you’re still not sure, ask your state insurance commissioner’s office to give you an opinion.
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.