Permanent Life Insurance Program

Life insurance is an income replacement tool, not an investment.  If you’re looking for help figuring out how much coverage your family is going to need in case something happens to you, you probably want to talk to an insurance agent.  A good insurance agent should also be able to talk with you knowledgably about the most cost-effective  way to secure  the  coverage your family needs. A good insurance agent will often steer you to inexpensive “term life” coverage.

Insurance companies sell many a variety of insurance products—in addition to term life policies– through licensed agencies Among these are so-called Permanent Life Insurance products, including “Whole Life”, “Universal Life”, “Indexed Universal Life”,  and  “Variable Universal Life”.  Permanent life policies are complicated insurance products that  generally provide lifelong coverage and the opportunity for the policyholder to build some ‘equity’ or cash value. These are insurance products; they are not investments.

If you want help planning for a financially secure retirement, you want to talk to an investment professional, not an insurance agent. Insurance products—including permanent life insurance products—are not designed to build wealth.

But insurance agents sometimes tell their customers that they can build their wealth by putting lots of their money into complex permanent life insurance products.

Recently, our firm became aware of an insurance agent who advised his customers to sell their mutual funds and to use the proceeds to purchase an Indexed Universal Life policy, explaining that it would be a safer investment for their retirement. There are several problems with this:

1. Insurance agents shouldn’t give investment advice, such as to buy or sell mutual funds;
2. Insurance policies are not investments ;
3. Insurance agents may have a personal financial interest when they promoting sales of permanent life insurance products to their customers.

If you have sunk lots of your savings into a permanent life insurance program and find yourself ‘stuck’, call the attorneys at ChapmanAlbin today. (216) 241-8172.