If You Don’t Know Where you are Going You Might End Up Somewhere Else

This iconic quote from Yogi Berra makes us wonder, are our policy descriptions illustrations or illusions?

We saw one case in which a universal life insurance policy was intentionally designed to last to age 100. It was properly presented by the selling agent and well managed since then. But because everyone recognized the possibility of a drop in interest crediting rates over time, there was even a fudge factor built into the premium cost.

That turned out to be a dangerous assumption. Several years later, the insurance company felt a need to increase their revenue. They exercised their ability to raise the charges by a seemingly small amount. The increase was properly disclosed. The effect of that increase was not.

A thorough policy review revealed that with the increase in annual premium, the policy would only last until age 85.

Fortunately, the client was only in their 60’s when this debacle came to light and there was plenty of time to take corrective action to avoid a possible lack of coverage.

Have you had your insurance policies evaluated by an expert who has earned the distinction of being a Life and Disability Analyst by the California Department of Insurance? We’re happy to provide additional information. Feel free to reach out to us at Stratus Financial Partners.

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