Is Your Policy Performing as Expected?

When you purchased your policies, you and your agent operated on a set of assumptions. Many of those assumptions haven’t become reality. We found better options for this client, whose policy was one of the many purchased in the 1990s that didn’t perform as expected. 

The Previous Coverage: Our client purchased a Universal Life policy in 1999 at a current interest rate of 5.75 percent. Based on projections made when he purchased the policy, he expected that his $8,733 annual premium would result in the policy endowing – or paying its death benefit whether our client lived or died – when he became 100.

Our Audit: Our audit revealed that lower than expected interest rates had drastically affected this policy. The policy that was supposed to cover our client until age 100 was currently projected to cover him for 10 years less: until age 90. Getting the policy back on track would require him to pay a $6,000 premium increase per year for a total of $14,558 annually.

A Better Solution: We identified a new policy with a lifetime guarantee for $10,701 annually, which eliminated further concerns about interest rate fluctuations.

Is your policy the investment you thought it would be? Or is it wasting your money?

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