Over the course of the last 30 years of being in and around the life insurance business I’ve seen agents and companies (and customers) make the products into the cure, the panacea, the over simplification┬á and the shortcut to their end goal. Keep in mind that the end goal of life insurance agents, companies and clients is not always the same, in fact, rarely so. Agents are making a living based on sales and coming in second in a contest to win a customer doesn’t pay anything, so there is incentive to be very good to your potential customers, or not get caught convincing them that you have shown them “the answer” even when it isn’t.

The companies have their own agenda and that has been an interesting journey to watch. In the late 80’s and 90’s the emphasis was on universal life and with interest rates running in the teens (sounds suspiciously like the indexed universal life of today), while the companies weren’t willing to guarantee those rates to build your cash value, they had agents that were more than willing to make you believe that those interest rates were here to stay and you would be a millionaire within 10 years just by buying life insurance. Starting about ten years ago, depending on when the policies went in force clients like the one in the next paragraph started asking these kind of questions,

“The letter I received from MONY was titled “Insufficient Value Notice”. This letter upset me, as it almost seems to be a threatening letter- to me, at least. I have had this policy since 06-09-90, and always had the premiums paid through direct withdrawal from our bank account. The policy is a “Flexible Premium Adjustable Life Contract” for $75,000, saying that this policy is currently paid on a monthly eft. (I checked- they have been withdrawing $70+ from our bank account every month. Now they are telling me that there isn’t enough value to sustain the coverage, and it is in danger of forfeiting. Minimum amount due is $433, which will carry my coverage until 05-09-16, if paid by 04–07-16. So this is $433 for *one* month of coverage? I assume this is my new monthly amount?

We received a similar notice on a policy we had on my wife about three or four months ago. We were looking to research it, but received another letter only a few days later, about that same account, giving me a deadline of only three or four days to respond. So I did, giving them the money to keep the coverage (at least, I thought), as well as a letter authorizing them to keep withdrawing $40 from our bank account. They have cashed the check, but have not been withdrawing from the bank account.

Now I am confused, and am hoping you can enlighten me.”

Bottom line. Sure, no problem. What happened is MONY didn’t train their agents to tell you what could happen, the worst case, even if you made all of your payments, when interest rates went down instead of remaining high. A lot of agents took that as license to only show you the best case and now you are going to lose your life insurance and all of the cash value that was in it at one point. Is that life insurance bait and switch? Sure it is! Can you find that agent 26 years later to argue the point? Highly unlikely. The agent made a pay day, the company made a lot and you got screwed. Ouch! If you have any questions please call or email directly. My name is Ed Hinerman. Let’s talk.