can you explain my policy universAL LIFE GENERion advantage
Total Comments: 1
Posted: Fri Aug 10, 2012 06:55 pm Post Subject:
Not exactly, at least without seeing a copy of it.
In general, all Universal Life Insurance contracts follow a basic premise: You pay premiums, the insurance company adds "current" interest, and then it deducts policy expenses (Cost of Insurance, policy fees, sales loads, administrative charges, cost of riders, etc). This happens every month, whether you pay premiums or not. The "current" interest rate is controlled and set by the insurance company, and every contract has a "minimum" guaranteed rate (except for Variable UL, which has no guarantee and could lose value). The interest rate may change, usually only once per year -- the contract will explain this.
After paying premiums and having interest credited, and once all the policy expenses have been paid for the year, you get an annual statement/report that shows all of these things, and lets you know how much value there is in your cash accumulation fund. That final amount always needs to be more than it was at the end of the previous year, and the actual amount of the increase needs to be more than it was the previous year. If either of those two things are not true, your policy is not performing properly and will continue to lose value unless the insurance company credits a higher rate of interest or you pay more premiums (or both). At any time the reports show the current year's value is the same or less than the previous year's value, your policy is in serious trouble, and things will probably only get worse if you don't start paying higher premiums each month.
When you see that condition in your statement, you must request an "in-force illustration" which will show you how much more you need to start paying now. If you let several years of decline go by, you may see the amount you have to pay to get back on track is far more than you have the ability to pay. This is the hazard of not paying attention to those annual statements.
Universal Life Insurance can work if you manage the policy properly. It takes some effort on an annual basis, but is something that can be learned. Unfortunately, most agents don't train their clients to do this, and those folks often lose a lot of money over time, and may eventually lose their life insurance altogether.
Having said all this, your policy could include some "guarantees" that prevent some of this from happening as long as you keep paying your premiums. None of those guarantees promise your policy will increase in value (with the exception of some Variable UL policies). And some of the guarantees guarantee that you will have little or no cash value, but promise that you will have a death benefit.
If you would like a more detailed explanation of your policy, email a copy of the contract to me, from cover to cover. Include copies of any annual statements you have, along with copies of any illustrations you were given. Click on the email link below.
Posted: Fri Aug 10, 2012 06:55 pm Post Subject:
Not exactly, at least without seeing a copy of it.
In general, all Universal Life Insurance contracts follow a basic premise: You pay premiums, the insurance company adds "current" interest, and then it deducts policy expenses (Cost of Insurance, policy fees, sales loads, administrative charges, cost of riders, etc). This happens every month, whether you pay premiums or not. The "current" interest rate is controlled and set by the insurance company, and every contract has a "minimum" guaranteed rate (except for Variable UL, which has no guarantee and could lose value). The interest rate may change, usually only once per year -- the contract will explain this.
After paying premiums and having interest credited, and once all the policy expenses have been paid for the year, you get an annual statement/report that shows all of these things, and lets you know how much value there is in your cash accumulation fund. That final amount always needs to be more than it was at the end of the previous year, and the actual amount of the increase needs to be more than it was the previous year. If either of those two things are not true, your policy is not performing properly and will continue to lose value unless the insurance company credits a higher rate of interest or you pay more premiums (or both). At any time the reports show the current year's value is the same or less than the previous year's value, your policy is in serious trouble, and things will probably only get worse if you don't start paying higher premiums each month.
When you see that condition in your statement, you must request an "in-force illustration" which will show you how much more you need to start paying now. If you let several years of decline go by, you may see the amount you have to pay to get back on track is far more than you have the ability to pay. This is the hazard of not paying attention to those annual statements.
Universal Life Insurance can work if you manage the policy properly. It takes some effort on an annual basis, but is something that can be learned. Unfortunately, most agents don't train their clients to do this, and those folks often lose a lot of money over time, and may eventually lose their life insurance altogether.
Having said all this, your policy could include some "guarantees" that prevent some of this from happening as long as you keep paying your premiums. None of those guarantees promise your policy will increase in value (with the exception of some Variable UL policies). And some of the guarantees guarantee that you will have little or no cash value, but promise that you will have a death benefit.
If you would like a more detailed explanation of your policy, email a copy of the contract to me, from cover to cover. Include copies of any annual statements you have, along with copies of any illustrations you were given. Click on the email link below.
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