There are certain aspects of owning a cash value life insurance policy that are pretty similar to the alternatives. Like all savings plans, there is a degree of management that must take place.
Part of the responsibility falls upon you, the policy owner and a part of the responsibility falls squarely on the shoulders of the agent that services the policy on your behalf.
Life insurance is not a “set it and forget it” type of product. This is especially true for whole life insurance, and even more so if it’s blended whole life insurance. When you blend a whole life insurance contract, you are making it operate in a similar fashion to universal life insurance.
In other words, you have now created a policy that should be monitored and needs to be intimately understood by your agent.
Don't get me wrong, the policies themselves are extremely stable, but there is still a need for distribution management and someone who knows how to help you capitalize on the opportunities that may present themselves.
Ex. Whole life insurance dividend or loan interest rate spreads, pledging policies as collateral, IUL DCA strategies.
When it comes to managing a policy for the purposes of income distribution, you must remember that the initial policy illustrations show an income stream, however there are a list of assumptions involved in that.
Loan interest rates change, and dividend rates or credited interest varies over the years., so what do you do in that case? Ah yes, the devil's in the details. We can't reveal ALL of our secrets 😉
Agents must be willing to keep a relationship with the client after the sale, as the point of sale is merely the beginning of the journey.
This is why we prefer to be specialists in the area that we serve. We know that our commitments to a client is likely a lifelong commitment to help them navigate various things along the way. Some thing will be opportunities, others may be obstacles…either way they will need us to be competent sources of information.
Truthfully, buying from one local agent who “does a lot of work” or who you “feel sorry for” can cause a lot of problem for you since these people may not know how to manage these policies correctly. Unfortunately, we are introduced to people all the time who have had this experience.
They bought from a local agent who didn't really understand the policy he/she sold them and then the client later discovers they've missed out on something or some part of the policy could perform better but their agent never informed them.
People should ask about the management process that an agent/broker intends to employ for an individual when it comes to policy management.