Many people feel that they have a permanent life insurance policy because it was illustrated as such when it was purchased from a good, highly rated, well know insurance company; from a reputable and honest insurance agent. The Universal Life product can be designed to last to age 100 and beyond if the initial assumptions have, in reality, come to pass. Whole life policies with dividends can become large enough to pay the entire premium. There are many policies out there today, that because of low interest rates which were actually credited to these polices and lower profit margins for the company, that have cash values significantly less than the original projections. Thus, the policy might not last as long as the original illustration. The policy might lapse before the insured dies. This happened in the early 1980's when the UL product was first sold. The interest rates in the late 1970's and early 1980's were in the double digits. Thus, the projected interest rates for the insurance company illustration, was also high. Interest rates declined and the policy didn't have enough cash value to support it with the original, low premium. The companies sent out letters requesting significant premium increases. If not paid the policy would lapse in a short time with no cash value. Policy holders were angry!! This is about to happen again! The low interest rates of the early 2000's have had a negative impact on the UL policies set up in the 1980's and 1990's. (I'm working on a video that will explain this situation better, so check back soon!)

The good news is that there are a number of good alternatives. There have been health improvements, underwriting has improved, life expectancy is increased. There are currently better products with lower costs, better methods of crediting interest issued by good companies that can actually guarantee coverage for life, not a specific age or subject to economic conditions over which no one has control.

One service we provide is to review your current policy, consider making any changes that might be appropriate given current your financial situation and compare it to other products currently available to you.

This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice to your situation...