Advisor Calls Out ‘Critical Flaws’ in Universal Life Policies

[Insurance Forums Staff]

Insurance Forums Staff submitted a new article

Advisor Calls Out ‘Critical Flaws’ in Universal Life Policies

“Whistleblower” Elan Moas says 9 in 10 UL policies at risk of lapsing before paying a death benefit in new book.

Continue reading the Original Article.

 

[Tahoe Ray]

This may sell 10s of copies.

 

[DHK]

He's getting his time in the sun and getting industry press for having published his book that challenges what people have already bought. He has now written a book, so that makes him an authority, even though it's likely self-published. I'm sure he uses it to help convince current policyholders to switch to a new contract. That's what the comments look like.

Don't get me wrong - I think the things he's bringing up are important. However, I'd rather have that as an appendix of a book, or a blog article (which I have written about), not the title of a book.

 

[rmhaire]

This may sell 10s of copies.

Not with that picture on the cover.

 

[Allen Trent]

Mass Mutual rep. While i agree with much of the points about UL, it isnt like WL has been immune to falling short of some projected future values & earliest premium vanish, etc

 

[Lloyds of Lubbock]

Falling short of expectations and lapsing are two entirely different subjects.
While your policy may not offset or distribute as much income as illustrated, if you pay the premium the policy will not lapse.
While this may be semantics (probably is) an illustration is not a projection.
There is a thought process with a projection.
There is no thought process with an illustration, it is what you are currently paying carried out into the future.
Now could you say this projection is based on the same dividend scale, same mortality cost and the same admin costs?
Yes you can, please include there is 100% chance of that not happening
I am always a bit leary of someone who writes a book.
What is the goal?
I hope not royalties.
You see these websites or authors who claims "I do it right" and offers a review.
That's like you can't find your own clients, so you are coming after mine.
So what makes his book different than any information previously published by Dick Weber or Robbie Samuelson?

 

[Allen Trent]

While your policy may not offset or distribute as much income as illustrated, if you pay the premium the policy will not lapse.

unless the UL/IUL/VUL has a no lapse protection guarantee, I am not sure I am understanding? Seen a lot of fixed UL policies over the years where consumers paid "the premium" & still lapsed when interest rates went from 12 to 4 or 8 to 4. This too can be the case with IUL/VUL unless "the premium" is designed to be overfunded, etc. The issue is that "the premium" is never really defined as how much is needed to guarantee coverage to not lapse unless it has a no lapse guarantee

 

[Lloyds of Lubbock]

If you pay your whole life premiums your policy will not lapse.
the premium" is never really defined as how much is needed to guarantee coverage to not lapse unless it has a no lapse guarantee
This is correct but even in a no lapse ul, does the policy state the premium in dollars or say the no-lapse premium.
Then what if you pay late does it change the guarantee?
A whole life policy has a stated guaranteed premium.
A policy bought 10 years ago probably does not look that different than the illustration.
15-20 years ago those policies will look a lot different.
I first came to Guardian in 1996, I saw some illustrations at the highest dividend rate of 13.25..............Sign me up

 

[PrivClientSG]

I heard about the book, and I bought it. Haven't gotten it yet so can't speak to details. However, there has been a great deal of bad press about UL. It's a potentially problematic product, but not for the reasons most people think. People -- even insurance professionals -- react as if it's an indictment of UL, when in fact most often it's not. It is an indictment, most often, of the way it was designed (by the agent), the way it was sold, the way it was funded, and the way it was serviced and managed (actually, the way it wasn't, LOL).

So, depending on what this guy wrote, said, portrayed, whether he has accurate data, and so on and so on...this could be an interesting read.

 

[PrivClientSG]

Mass Mutual rep. While i agree with much of the points about UL, it isnt like WL has been immune to falling short of some projected future values & earliest premium vanish, etc

Apples and bowling balls. Clearly you see the difference.