Most of you are aware that I am a huge fan of Whole Life Insurance and the comparison below will explain why.
You may own a Universal Life policy that was written in the ’80s and ’90s and aren’t aware your policy is not performing nearly as well as projected. Let me explain….
Many of these policies were sold during an extremely high-interest rate environment. The illustrations that helped sell these policies assumed a 10 – 12 % interest rate for 50 or 60 years. The problem is that interest rates have continued to fall since then to the minimum guaranteed rate promised by the insurance companies, which is far below what was projected. This coupled with the fact the actuarial assumptions on these policies have never been tested (unlike Whole Life which has been around for over two hundred years) make these plans even more fragile.
Individuals who bought Universal Life plans may think their policy is still doing just fine even though it’s very likely in danger of running out of cash and having no death benefit at all. As these insureds are now in their 60s and 70s and bumping up against life expectancy; there is concern that the cost of insurance may have to increase to compensate for extremely low-interest rates and increased mortality experience. On the other hand, Whole Life premiums are guaranteed never to increase regardless of what the economy is doing.
If you have a Universal Life policy, please contact me at 574-234-1980 or NeeserInsurance.com for a free review and to discuss how I can help you design a Universal Life RESCUE plan.
