Caution – Old Universal Life Policies

Being an insurance agent, I try to help people, not scare them. However, sometimes we have to face some unpleasant realities. Most evident is that each and every one of us will die at some point. That is why we buy life insurance to financially protect those we love. Another reality is that maybe even if we bought life insurance at one point, that policy may be failing to do what we wanted it to do. This is especially true of Universal Life policies that were purchased in the 1980’s. Many reputable insurance companies sold policies to consumers who may have been misleading (or did not fully understand how UL policies worked.) These policies were sold as permanent policies, (not term). They may have been misrepresented as policies with “vanishing premiums” or “wealth generating”. These are interesting dependent policies and provide a death benefit only as long as there is cash value in the policy. Interest rates have dropped significantly from those of the 1980’s, yet the internal cost of insurance goes up as the insured ages. The policy can run out of money (fail). Unfortunately, this has happened to many people and is continuing to cause much consternation to unsuspecting life insurance owners.

Your insurance company is required to send you an annual report on your policy. They are keeping you informed. But what I see in the “real world”, is that the majority of people do not read the statements, and even if they do, they do not fully comprehend them. This can lead to a lot of heartaches. Please, do yourself and your loved ones a favor. Call me for a no-obligation consultation about your policies. I will be happy to review them and try to help.

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