I received an email from North American Life today touting their indexed universal life products as the second coming of the 1980’s. I can’t believe that life insurance companies still lean on agents to push non guaranteed assumptions on unsuspecting customers. There is a segment of the industry I work in that just strolls through life with absolutely no conscience.

By the way. When I talk about the second coming of the 1980’s, it is not a good thing. Back in the 80’s when the universal life product went bonkers, agents wouldn’t think twice about telling a customer that they were not only going to have life insurance forever, but were going to get filthy rich for having owned it. This was all based on the wildly high interest rates at the time and assumed that those interest rates would always remain high.

While North American and other companies aren’t claiming that their policies will build cash value at the 1980’s 18% rate, to claim in the year 2009 that you should expect a constant 8% or higher return is just wrong. I hate when any agent suggests that any client look at, let alone use, non guaranteed rates as a reason to buy. The higher the non guaranteed interest rate, the more unconscionable the act becomes.

Just like banks and mortgage companies and credit card companies need to clean up their act and change their ways of thinking, life insurance companies need to quit pretending it’s OK to hang a possibility out there to lure customers in knowing full well that historically the assumptions don’t hold up.

All of this is tapping into the greed that has brought our country to its’ knees already. We have great guaranteed products but at some level people want more from their life insurance than just life insurance. They just don’t want to pay for it. Are you getting the drift. These products get sold by greedy agents who don’t do the right thing for their customer that really wants wealth to accumulate where there is none. Something for nothing never has been a good plan.

Bottom line. If you have a need for permanent life insurance, but universal life with a no lapse guarantee and know that what you have isn’t going to come back and bite you in the butt. Steer clear of indexed universal life, variable universal life and whole life. If your needs aren’t permanent, buy term insurance.

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