Rising Premiums On Universal Life Policies Impact Seniors
Potentially Misleading Policy Illustrations
Low Rates Of Return
Evans Law Firm, Inc. recommends against indexed universal life insurance and deferred annuities for senior consumers because both insurance products are expensive, complicated, and tie up invested money for long periods of time. Typically, deferred annuities are sold as single premium policies but with universal life insurance the premium payments are periodic and increase over time. This can be a real struggle for seniors as discussed below. Always get a second opinion from an investment advisor with nothing to gain from any sale of a deferred annuity or life insurance and talk to your tax advisor as these products have significant tax consequences on purchase, replacement, or surrender. If you are over 60 and have already purchased a deferred annuity or universal life insurance policy and live in San Mateo County, San Francisco or elsewhere in California, call us today at (415441-8669 or toll free at 888-50EVANS (888-503-8267).
Disadvantages Of Indexed Universal Life Policies
Disadvantages to universal life insurance policies include:
- Premiums will rise over time. If the increased premium amounts are not paid the policy may lapse. Most universal life insurance policies require you to pay premiums until you pass away to keep the policy in force.
- Cash value can fluctuate with markets. Indexed universal life insurance can tie your earnings into how a certain market index is performing, like the S&P 500. If your investments or markets perform badly, you won’t be growing cash value.
- Withdrawing money from the policy will reduce the death benefit and increase your premiums.
- Withdrawing money from the policy will also result in surrender policies. Surrender penalties and other adjustments are imposed for as long as 15 years on some IULs.
- You do not fully participate in the market. Your participation rate in the index is not 100% and you do not receive the benefit of reinvested dividends as you would in a direct mutual fund investment,
- Your return will be capped. Even if the index you chose grows, your growth will be subject to a cap so that you do not receive the full benefit of the growth in the index.
If you would like us to review your indexed universal life insurance policy, contact Ingrid M. Evans at Evans Law Firm, Inc. for a free evaluation of your policy toll free at (888)50-EVANS (888-503-8267), or by email at <a href=”mailto:firstname.lastname@example.org”>email@example.com</a>.
Leading providers and distributors of universal 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 International Group, Inc. (AIG)
American National Life Insurance Company
Athene Annuity & Life Assurance Company
Athene Annuity and Life Company
Aviva Life Insurance Company
AXA Equitable Financial Services, LLC
AXA Equitable Life Insurance Company/AXA US
AXA Advisors, LLC
Brighthouse Financial, Inc./MetLife
EquiTrust Life Insurance Company
Fidelity & Guaranty Life Insurance Company
Genworth Financial, Inc.
Genworth Life and Annuity Insurance Company
Genworth Life Insurance Company
Guggenheim Partners, LLC
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
Metlife/Metropolitan Life Insurance Company/Brighthouse Financial, Inc.
Minnesota Life Insurance Company
Nationwide Investor Services Corporation (NISC)
Nationwide Life and Annuity Insurance Company
Nationwide Life Insurance Company
New York Life Insurance Company
Northwestern Mutual Investment Services, LLC
Northwestern Mutual Life Insurance Company
Northwestern Mutual Wealth Management Company
Pacific Life & Annuity Company
Pacific Life Insurance Company
Security Benefit Corporation
Security Benefit Group, Inc.
Security Benefit Life Insurance Company/Guggenheim Partners
Security Investors, LLC
Security of Denver Life Insurance Company/Voya
Transamerica Life Insurance Company
Voya Financial Advisors
Voya/Reliastar Life Insurance Company
World Financial Group Insurance Agency, Inc.