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Feb 2, 2015 by |

Index Life Insurance Policies are Highly Problematic for Seniors


Index Universal Life insurance policies are long-term, fixed investments. As the name suggests, it is a permanent life insurance product. Universal life insurance policies are said to guarantee payments to beneficiaries, once the policy holder dies. AXA Equitable Life, Penn Mutual Life, Midland National, Lincoln Financial, Pacific Life, National Life, Transamerica Life, John Hancock Life, and Minnesota Life are companies that commonly sell such policies. Seniors often invest in Index Life policies, thinking that they can protect their dependents financially. However, there are a number of reasons why seniors should not consider Index Life policies.

First and foremost, Universal Life policies rely on the stock market growth to yield returns for its investors. As we all know that the stock market is unpredictable, no insurance company can ever guarantee market values. This makes index life policies, a high risk investment for seniors. Furthermore, Indexed Universal Life Insurance policies tend to have a number of ongoing fees that increase over the duration of the policy. Since Index Life policies end only after the policyholder dies, seniors are ultimately faced with paying high policy premiums.

AXA Equitable Life, Midland National, Penn Mutual, Lincoln Financial, Pacific Life, Hancock Life, Transamerica, and Minnesota Life offer Universal life insurance policies. However, seniors should make sure they have enough discretionary income for such investment. For those in need of cash, they often take out a policy loan against the cash value that was built in their universal life policy. While this sounds good in theory, one cannot gain full access to the money that they have saved. At best, you will only be able to take out a portion of the cash value in the form of a policy loan. Since there is limited access to gain returns on your investments, you can only take out a portion of the money, lowering the return as well. Another option to gain access to one’s savings is to withdraw all the money in the policy. However, by doing so, you will also have to pay high surrender fees.

Therefore, Index Universal Life insurance policies are more suited for policy holders with a high net worth, and are financial savvy investors. The problem is that Universal Life Insurance policies have increasingly been targeted to older citizens and individuals that may not understand the risks involved or have little knowledge about the terms and conditions of Life Insurance policies. Index Universal Life policies have been a popular product in companies such as AXA Equitable Life, Midland National, Penn Mutual, Lincoln Financial, Pacific Life, Hancock Life, Transamerica, and Minnesota Life. Despite its popularity, seniors should be clear on what their insurance policies entails, before getting involved in such investments.

The Evans Law Firm handles insurance and consumer fraud cases, and class actions. If you or a loved one have purchased an Indexed Universal Life policy product from any of the mentioned insurance companies, and would like a free and confidential legal evaluation, please contact the Evans Law Firm, Inc. at (415) 441-8669 or

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