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Apr 4, 2019 by |

San Francisco and California Life Insurance, Annuity and Financial Elder Abuse Attorneys: What You Need to Know About Equity Indexed Universal Life Insurance


Understanding Risks and Downsides

Insurance carriers and agents and financial advisors push life insurance in any form: term life insurance, whole life insurance, and universal life insurance. Whole life insurance and universal life insurance pay higher commissions than term life insurance (the premiums are higher too) so pay extra attention when you’re offered whole life insurance or universal life insurance, especially if you’re a senior as the policies may be inappropriate for you.  One of the newer life insurance products aggressively marketed by agents is indexed universal life insurance sometimes sold as equity indexed universal life insurance. 

Our lawyers recommend caution when considering equity indexed life insurance and want to review just some of the risks you should consider, particularly if you’re an older consumer.[1]  If you’re over 60 and live in California and have suffered a loss due to cancellation, replacement, full or partial surrender, or high fees on an equity indexed universal life policy, call the attorneys at Evans Law Firm, Inc. today at 415-441-8669 for a free review of your policy.  A list of major carriers in California appears below.

Here are some of the risks and downsides to equity indexed universal life insurance that you should consider:

  • Pay close attention to any illustrations of projected returns. Historical stock market returns may skew projections upward. Illustrations may assume a given rate of return will recur every year for long periods of time. Market indexes do not operate that way and long-term assumptions can be misleading.
  • Life insurance and annuities are illiquid and tie up your money for a long time. Policy loans and surrenders (on which you’ll pay a penalty) are expensive.
  • Cap and participation rates limit your return. If your policy has a 9% cap rate and the market index raises 15%, the most you will receive for the crediting period is 9%. If your policy has an 85% participation rate, you will only see 85% of any index growth (subject also to the cap).
  • Your money is invested in indexes not stocks so you do not receive any dividends on individual stocks included in the chosen index.
  • Costs for insurance and administrative expenses are deducted from policy value every month. When a carrier’s costs go up, the carrier passes those increased costs on to you.
  • Be wary of guarantees. If chosen indexes do not perform as projected, your policy value (and “guarantee”) could end up being far less than advertised.
  • Death benefits fluctuate and are not guaranteed. If you miss or delay making premium payments or loan repayments, or make a partial surrender, that can reduce your death benefit guarantee or eliminate it altogether.
  • You bear all the risk under the policy. If returns are low, your premiums may skyrocket leaving you the choice of paying higher premiums or allowing the policy to lapse and losing everything you’ve paid in.

Bottom line is, beware. Equity indexed life insurance is costly, complicated, and risky.  Always consult a qualified professional who does not stand to gain from your purchase and review any proposed investment or change in investments with your tax advisor before making any purchase, replacement or surrender. 

Contact Us

If you or a loved one has suffered loss on an equity indexed universal life insurance policy in California, contact San Francisco and California life insurance, annuity and financial elder abuse attorney Ingrid M. Evans and the other attorneys at Evans Law Firm at (415) 441-8669, or by email at <a href=””></a>. Our attorneys have experience with complex financial contracts and large insurance companies. We can help guide your case through a jury trial or toward an equitable settlement.  We handle cases involving physical and financial elder abuse, qui tam and whistleblower law, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.

Annuities and life insurance, including equity indexed universal life, produce large sales commissions for brokers but are often inappropriate products for consumers, especially seniors. Leading providers and distributors of life insurance and fixed, variable and fixed indexed deferred annuities in California are listed below.  We are not in any way suggesting that any of these carriers or distributors has done anything wrong.  Rather, the list is provided solely as a reference for our readers.

AIG/American General Life Insurance Company

Allianz Life Insurance Company of North America

American Equity Investment Life Insurance Company

American General Life Insurance Company/AIG

American National Life Insurance Company

Ameriprise Financial/RiverSource Life Insurance Company

Ameriprise Financial/Securities America, Inc.

Athene Annuity & Life Assurance Company

Athene Annuity and Life Company

Athene USA

Aviva Life Insurance Company

AXA Equitable Life Insurance Company/AXA US

Bankers Life Insurance and Casualty Company

Berkshire Hathaway Group

Berkshire Hathaway Life Insurance Company of Nebraska

Brighthouse Financial, Inc./MetLife

Citigroup Global Markets, Inc.

Crump Life Insurance Services, Inc.

CUNA Mutual Group/CMFG Life Insurance Company

Delaware Life Insurance Company

EquiTrust Life Insurance Company

Fidelity & Guaranty Life Insurance Company

Forethought Life Insurance Company/Global Atlantic Financial Group

Genworth Financial, Inc.

Genworth Life and Annuity Insurance Company

Genworth Life Insurance Company

Global Atlantic Financial Group/Forethought Life Insurance Company

Guardian Life Insurance Company

Guggenheim Partners/Security Benefit Life Insurance Company

ING USA Annuity and Life Insurance Company

Jackson National Life Insurance Company

John Hancock Life Insurance Company

Lincoln Benefit Life Company

Lincoln Financial Group

Massachusetts Mutual Life Insurance Company

Merrill Lynch Life Agency Inc.

Metlife/Metropolitan Life Insurance Company/Brighthouse Financial, Inc.

Minnesota Life Insurance Company

National Life Group

National Life Insurance Company/Equity Services, Inc.

National Western Life Insurance Company

Nationwide Life Insurance Company

New York Life Insurance Company

North American Company for Life and Health Insurance

Northwestern Mutual Investment Services, LLC

Northwestern Mutual Life Insurance Company

Northwestern Mutual Wealth Management Company

Oxford Life Insurance Company

Pacific Life Insurance Company

Penn Mutual Life Insurance Company

Principal Financial Group

Prudential Life Insurance Company

Raymond James Insurance Group

Reliance Standard Life Insurance Company/Tokio Marine Group

RiverSource Life Insurance Company/Ameriprise Financial

Securities America, Inc./Ameriprise Financial

Security Benefit Group, Inc.

Security Benefit Life Insurance Company/Guggenheim Partners

Security Investors, LLC

The Standard Life Insurance Company

Symetra Financial Corporation

Symetra Life Insurance Company

Transamerica Life Insurance Company

 Unum Life Insurance Company of America

 USAA Life Insurance Company

 Voya/Reliastar Life Insurance Company

Wells Fargo Advisors

Western & Southern Financial Group

The Western & Southern Life Insurance Company

 World Financial Group Insurance Agency, Inc.

[1] The attorneys at Evans Law Firm do not provide investment or tax advice but our litigators represent senior policyholders who lose money through cancellations, surrenders or fees on these contracts or as the result of insufficient disclosures by insurance agents and carriers.

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