Universal Life Insurance. Buyer Beware!
What is universal life insurance? Universal life insurance first hit the market in the 1980’s and, over the years, has been the source of both praise and anger from clients who have owned the policies. In it’s traditional and more recently indexed forms it has, unfortunately, been represented by greedy life insurance agents as a cure all for your life insurance and retirement needs. Both the traditional and indexed forms of universal life rely on outside investment and interest that the company has no control over. If those outside factors under perform the policy can lapse, leaving clients without insurance, any retirement extras they were hoping for, and all the money they paid into the policy.
Over promised and under performed!
Like any insurance product, there are pros and cons to universal life insurance. Both traditional and indexed universal life insurance do well in high interest and steady stock market growth environments. The aforementioned greedy agents have sold these products as if those environments are a given, almost guaranteed. That hasn’t been the case with hundreds of thousands of policies. Not all life insurance agents are unscrupulous and the universal life policies that are presented and sold correctly have at least kept the life insurance side intact. Retirement success stories with universal life are few and far between and mostly because policy owners got lucky by getting into and out of the policies at the right time.
The main premise of these policies is that they are supposed to provide a death benefit that can’t be outlived. After all of the failed products life insurance companies took a page from European life insurance playbooks, term life insurance to age 100. U.S. companies renamed the product “no lapse guarantee universal life”. Instead of tying the product to interest or markets, like term insurance, the guaranteed life long death benefit is guaranteed internally and there is no retirement cash value accumulation factor. The product is less expensive than traditional and indexed universal life and is fully guaranteed to remain in force with a guaranteed level death benefit, guaranteed level premium and a lifetime guarantee to remain in force.
Hinerman Group has never sold a policy that failed, never misrepresented what a policy will do and has never failed to provide life long protection when it’s needed.