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Sep 3, 2021 by |

Santa Clara County Financial Elder Abuse Attorney: Disadvantages Of Universal Life Insurance For Senior Consumers


Rising Premiums And Low Returns Of Universal Life Insurance

Potentially Misleading Policy Illustrations

Limitations On Growth

Insurance agents often sell Indexed Universal Life Insurance as a tax-deferred estate planning investment, using the same sales pitch agents often use for deferred annuities. We recommend 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.  Do not allow an agent to pressure you into any kind of sale including of universal life insurance or deferred annuities.  Always get a second opinion from an investment advisor with nothing to gain from a sale and talk to your tax advisor as these products have significant tax consequences on purchase, replacement, or surrender.  If you have already purchased a deferred annuity or universal life insurance policy and have experienced an economic loss, we can help.  Evans Law Firm, Inc. represents clients who have suffered losses on indexed universal life insurance.  If you or in Santa Clara County, San Francisco or elsewhere in the Bay Area or California, call us today at (415441-8669 or toll free at 888-50EVANS (888-503-8267).

Indexed Universal Life Insurance (IUL) Disadvantages

Here are some important disadvantages of IUL contracts to keep in mind:

  • Commissions and fees are high. Indexed universal life insurance carry substantial upfront sales commissions (7-10% or more) and annual charges fees and fees for: administrative expenses and mortality (or cost of insurance) charges.
  • Premium increases over time. Aging policy owners are seeing their premiums on universal life insurance skyrocket. Lawsuits continue to mount from policy owners who feel they have been misled regarding premium increases. Policies will lapse if the increasing premium payments are not made.
  • Only using the cash value to cover the premium will eventually make the policy run out of cash value, at which time the policy may lapse and your coverage may end.
  • You do not fully participate in the market. The amount of return you receive is based on futures the carriers purchase in market indexes not real investments in stocks. 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,
  • You will lose money if you need to withdraw your funds. Surrender penalties and other adjustments are imposed for as long as 15 years on some IULs.
  • 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.  This would not be the case if you made a direct investment in a fund for the index.

Contact Us

If you have sustained a loss on an 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=””></a>.

Annuities and life insurance 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 International Group, Inc. (AIG)

American National Life Insurance Company

Athene Annuity & Life Assurance Company

Athene Annuity and Life Company

Athene USA

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.

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