Is your cash value life insurance policy living up to expectations? Many whole life and universal life policies that were purchased in the 1980’s and early 1990’s were purchased with an underlying interest assumption that was significantly higher than it is today. At that time, insurance carriers were crediting policies with record high interest payments. Today, many of those same carriers are paying interest at record lows. All else being equal, a policy can’t help but to under perform.
If you are actively following your policy you may realize the effects of under performance by noticing less than expected cash values, projected lapse dates well before life expectancy, or perhaps even strong suggestions from your carrier to increase premiums.
Many life insurance policies that are being written today take into account recent mortality tables, maturity dates that extend beyond age 100, and much more robust guarantees. As a result, these new policies are often times a good alternative to a policy that isn’t living up to your expectations.
Be sure to seek the advice of a professional as to whether or not it would make sense to change.
* Guarantees are based on the claims-paying ability of the issuing insurance company.