Life Insurance Warning!

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Posted: Mon Dec 05, 2011 7:30 pm Post subject:

Quote:

UL policies that I sell do not and will not lapse! They are funded properly!

Taxfreeincome, I believe that you believe that you are telling the truth.

I can even believe that they are currently funded properly.

How do you know that they will be funded properly in the future?

Human nature combined with an annually increasing cost of insurance is a recipe for disaster. These policies work much better in a laboratory than they do in the real world. Here's a difficult challange for you. Find a person who has had a UL policy for a long time AND if they keep putting in the same premium won't have the policy lapse.

You probably won't be able to do it. Even if policies are properly funded at some point, they tend not to stay that way.
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fkakvmar

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Posted: Mon Dec 05, 2011 8:30 pm Post subject:

Sorry, I "lied". I would like to add to the comments above.

Quote:

Here's a difficult challange for you. Find a person who has had a UL policy for a long time AND if they keep putting in the same premium won't have the policy lapse.

and, more importantly

Quote:

Human nature combined with an annually increasing cost of insurance is a recipe for disaster.

100% accurate and honestly stated.

I can show you a real example of a person who was in his late-50s when he purchased a UL policy, paid his "scheduled" premium faithfully for more than 16 years (less than $200 per month for $100,000 death benefit), and received a lapse notice due to insufficient cash value. He was not my client, but the 75 year old husband of one of my students in November 2007.

We ordered an in-force illustration to solve for premiums to age 85, and the answer was $10,797 per year ($897+ per month!) to keep a $100,000 death benefit alive for only 10 more years. It would have cost over $269,000 to keep it going 25 years to age 100, with a final cash value of less than $1200. There was no way to win in this situation.

Borrowing any amount of money along the way . . . that would only have made things terribly worse.

I am currently working with a person, again not one of my clients, whose father's UL policy lapsed because a $55 loan interest payment was not made. Then he died. That's what I call terribly much worse. And his policy was continuing at the time under a Waiver of Monthly Deductions rider. That rider was not written to pay the loan interest.

I'm sure TaxFreeIncome, as "fkakvmar" said above, absolutely BELIEVES what he says. But some of us know it's not the way things really are in the world of UL insurance. And we're trying to let you all know that.
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CA-licensed P&C Broker-Agent and Life Agent. CA Insurance Lic #0596197. Now investigating insurance company abuses, and providing litigation support and expert witness services. Send me your questions, and I'll send you my answers.

MaxHerr

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