For months, no years now I have been writing about and telling clients about the best permanent product on the life insurance market and how, if they drug their feet long enough considering the purchase, a day would come when they would look back and say, “Dang! Wish I would have done that before the price increase”. No lapse guarantee universal life insurance has been and will continue to be the best thing since sliced bread in the insurance world. It is just going to be more expensive unless you start the application process now.
But alas my blog only reaches so many people, those who are truly interested in saving money on their life insurance either through better prices through better impaired risk underwriting, or like a slug of people just recently, trying to take advantage of this truly once in a lifetime opportunity. Since the NAIC (National Assoc of Insurance Commissioners) announced that companies would be required to comply with AG38 (Actuarial Guideline 38) a few months ago, people are replacing their pathetic AARP/New York Life plans, buying small ($250k and under) policies for final expense, or replacing truly disastrous traditional universal life with NLG ul’s at pre-increase rates.
Two months after the change was announced and after those on the ball in the life insurance business had been screaming and writing to warn everyone that might be affected, the Wall Street Journal wrote an article on the subject. Good timing since the door has already been shut on many of the good deals and with the deadline for complete compliance with AG38 being 1/1/13. But, nevertheless, one of the louder voices around finally squawks that the sky is falling. The more clamor the better as for instance, in the case of Banner Life, their increases are going to be as high as 9%. Other companies have indicated an increase that could be as high as 20%. And guys, they aren’t doing that because their current pricing is working out well for them. Well before AG38 mandated that reserves on these type of policies be larger, companies have been running scared from their own products and pricing. They all got caught up in the competition of it all and suddenly the pricing was too good to be true.
Just in case you are frozen like a deer in the headlights and can’t move to buy at the old prices, your saving grace is going to be that even at 20% higher rates, the no lapse guarantee UL is still going to be the best product and the best price if you need something permanent, whether it’s a small final expense policy or a $100 million estate preservation policy. Now that I’ve made you feel better here is the board upside the head. When you put off buying permanent life insurance until it is 9% or 20% higher, remember that you aren’t paying higher rates for a 10 year term, that 20% goes on to age 100.
Bottom line. If Wall Street Journal says jump you should probably pay attention since professionals in the business have likely been suggesting you jump for months or even years prior. If you have any question about this rapidly closing window call or email me directly. On the small side this could save you thousands over your lifetime. If you’re protecting a large estate with life insurance this product, I kid you not, could save you millions over your lifetime. My name is Ed Hinerman. Let’s spend a few minutes talking and make sure that if you aren’t doing anything to capture this flag, that’s a prudent move.