Indexed Universal Life Insurance
How do you know if the life insurance policy you bought is good? Did you rely on an agent to sell it to you? Were you given any comparisons when you were making your decision? Now that you’re paying the premiums, have you compared the performance of the policy to what it was projected to be worth? What would happen if the policy’s cash value performance is less than what was projected?
The process of evaluating a life insurance policy, and the carrier offering it, isn’t an easy one, and these are all important questions.
If you bought Indexed Universal Life insurance (commonly known as IUL) you were probably given certain information by the agent. The information may have been a marketing brochure explaining the features of the policy. You may also have been given a computer-created illustration showing how the policy value will grow over your lifetime. These are standard tools used by agents in marketing IUL. These are often the only documents that buyers get, and while they’re helpful, they represent only a snapshot in time.
Review, Review, Review
Would you be concerned if your policy only had a ten percent chance of being in effect 15 years from now? Would you buy a policy if the fees were going to triple when you turned 65 years old? These are real issues that can be addressed well in advance of becoming real problems for a policy-owner. With all flexible premium life insurance policies — Indexed UL, Variable UL, and Universal life — it’s critical for the policy-owner to review their policy with a licensed agent every year. This is how you can be sure to maintain the policy throughout your lifetime.
Use the Best Policy Buying Resources
If you haven’t bought a life insurance policy yet, but are considering doing so, use the best tools and resources you can to get educated before buying.
We don’t endorse any one life insurance agent or company but we like the tool Huntley Wealth Management has created to assist buyers, in an unbiased way, to evaluate the best life insurance policy for their situation. They’ve created a user-friendly tool which considers many different factors and priorities people have when they buy a policy. Too many buyers focus only on price. This tool, in addition to price, lets you make a buying decision based on health problems, rapid response times, age-specific pricing, and many others.
Take a look at this unique tool for buying life insurance:
click==> Life Insurance Sweet Rates Sorter.
More About Indexed Universal Life Insurance
Indexed Universal Life insurance is a permanent type of life insurance policy that earns interest according to certain index performances (i.e. Standard & Poor’s is a common index). The basic idea is that you can accumulate money within the policy while you are young and then the policy will support itself (instead of being supported by premium payments) when you retire. With a little more detail, this is a common premise for how many policies are sold.
Instead of investing directly into the stock market in the way you can with a variable universal life insurance policy, an Indexed UL policy credits your cash value according to the returns of a certain stock market index. In this way the policyholder isn’t buying a stock and won’t be exposed to declines in the index directly effecting their policy cash value. But these policies still have significant risks. It’s imperative your agent fully disclose these risks.
Not the least of the risks is the ever-increasing cost of insurance embedded in Indexed Universal life insurance. This is a cost that an agent can measure each year and counsel the policy-owner about how to deal with so the policy doesn’t lapse. When the embedded cost of insurance charge exceeds the annual premium the policy value begins to decline. When the value declines to zero, the policy is lapsed and coverage is cancelled. With an agent’s guidance unexpected lapses can be avoided.
Have an Indexed UL policy that hasn’t done what was promised? Contact us to discuss how we can recover your premiums from the insurer.
The Center for Life Insurance Disputes will do an analysis of your Indexed Universal Life Insurance policy. While your agent can project the value of the policy into the future, we can do a deeper review of the policy. We’ll drill-down into the language of the policy. We’ll analyze the factors and conditions the insurer has to follow before they can increase the costs of your policy and before they can lapse your policy.
Think about what changes you would make if your policy had an eighty percent chance of lapsing before you die. We’ll analyze the chances of it happening. You’ll learn if you’re holding a winning hand or a house of cards that is certain to crumble in the future.
