Life insurance policy loans are often marketed as a flexible, tax-free way to access cash. But when loans aren’t managed carefully, they create a quiet drag that erodes a policy’s value over time.
One reason for loan drag is negative arbitrage. Negative arbitrage happens when the interest rate charged on a policy loan exceeds the…
If you have a permanent life insurance policy — whole life, universal life, indexed or variable — you’ve probably been told it should be “reviewed regularly.” While that’s good advice, many superficial reviews only skim the surface.
Many times, the problem is agent bias. Agents may be incentivized to sell new policies or present the…
A permanent life insurance policy usually doesn’t fail overnight. Instead, it enters a “danger zone” where internal costs begin to outpace the interest being credited. This can create a technical lapse risk — a policy looks active on a statement but is actually structurally unsound.
If you’ve only paid the minimum funding required by your…
Permanent life insurance is often marketed as “set it and forget it,” but there’s a level premium myth many policyholders don’t fully understand.
Unlike Whole Life where premiums are fixed, Universal Life (UL) premiums are not a “locked-in” low cost for life. They may appear stable, but underlying internal costs like cost of insurance (COI)…
Long hold times? Getting the runaround? Inaccurate information? Working with insurance companies can be frustrating, but it’s worse when they hide policy drift behind guaranteed assumptions.
Illustration drift happens when a policy “drifts” away from its projected performance over time. Drift is a slow, gradual decline that often goes unnoticed until the cash value is…
When people review a life insurance illustration, they often assume they’re looking at a promise. In reality, they’re reviewing two different things side by side: guaranteed values and non-guaranteed values (illustrated values).
Guaranteed values are “worst-case” estimates that show how a policy performs if an insurance company pays the bare minimum and every internal assumption…
Universal Life (UL) insurance is often sold as a flexible, permanent solution for wealth transfer and protection. However, the very flexibility that makes it attractive also creates a silent lapse risk.
Unlike whole life products with fixed premiums, Universal Life (UL) policies are designed to be cost-efficient and maximize the rate of return. As a…
Life can change quickly, and when finances become uncertain, life insurance premiums often fall behind. But when those payments stop, a policy can lapse — and once that happens, your coverage ends.
The good news is, if your policy has only recently lapsed due to missed payments, reinstatement may still be an option.
How It…
Is your term life insurance ending soon? As the deadline approaches, you might be worried about your policy lapsing or losing your coverage. But you have options, one of which is a term conversion. A term-to-permanent (or term-to-perm) conversion allows you to turn your existing policy into a permanent policy, keeping some or all of…
Indexed Universal Life (IUL) insurance is a type of permanent life insurance with a cash value component that grows based on a stock market index, like the S&P 500. It offers tax-deferred growth and protection from market losses, but returns are subject to cap/participation rates.
As the IUL market expanded over time, the need for…
