Life Insurance Loans are the one thing just about every agent who has cash value life insurance in their quiver can tell you about. And why? Because they're TAX FREE! But wait, there's more…

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Unfortunately, however, we're not about to tell you about what you get if you call within the next 15 minutes. No, instead we're about to let you down somewhat hard. The more to this story is the ugly side of life insurance policy loans. To be clear, this isn't some tirade against them as I've been known for some other slick life insurance trick. Nor is it a suggestion that you not use them. We simply need to set some ground rules to keep you all honest and out of trouble.

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Indexed Universal Life has become a star of the cash value life insurance world, but oddly this relatively simplistic product has been the center of a little confusion–unfortunately in large part on the behalf of the agents that sell them.

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It's August, time to think about Life Insurance? That likely isn't an intuitive statement, but those of us in the know  understand that September happens to be an awareness month marked by the acronym LIAM or Life Insurance Awareness Month. Usually, we save the brouhaha for September 1st (and for those of us who don't feel punctuality is particularly important, we wait until after Labor Day).

But for one financial blogger, the decision has been made to kick start life insurance awareness about a week and a half early. We all have Jeff Rose over at Good Financial Cents to thank for this one.

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Whole life dividends are a commonly misunderstood topic.  This is due in large part to the sometimes intentional convoluted nature of whole life insurance.  That's not an attempt to knock it down.  Whole life insurance is certain a powerful and worthy insurance contract for your financial needs, and as an asset it certainly complements portfolios as a low risk and/or alternative investment choice.

 

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Guaranteed Universal Life has been a star life insurance product for a number of years. It became the number one answer to permanent death benefit for the lowest possible premium.

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All this week I'll be appearing on The Business Insurance Zone with Steve Savant.  Steve and I will be discussing competition aspects of the industry, including the foolish things agents, IMO's, and carriers do to pretty-up their product illustrations at the detriment of clients.  This is a topic the Insurance Pro Blog has focused on in the past.

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Universal Life Insurance rolled out to a lot of excitement and confusion.  Originally released in the late 70's, this products was incredibly innovative for it's day.  A premium that could be adjusted (at will) up and down and the ability to surrender cash values without taking a policy loan to get them.  Sounds like standard operating procedure these days, but it certainly wasn't the case when it first arrived on scene.  The industry and regulators were up in arms about whether or not the product could even be considered life insurance.  The Tax Equity and Fiscal Responsibility Act of 1982 made a final decision on that (the answer was yes).  And TEFRA was one of those hoorah Republican/Grover Norquist drag the government into the bathroom and drown it in the bathtub sort of legislative accomplishments.

Then, like a crack-head on day two of a detox program, the Government quickly realized it needed a hit and passed the Deficit Reduction Act of 1984.   DEFRA took a mean swipe at the life insurance industry as it sought to eliminate the use of life insurance as a fairly unlimited tax shelter (and entire careers were made in the matter of months as money rushed to life insurance to be grandfathered from DEFRA's new rules).  So, with the hide your money train pulling out of the station, insurance agents who neglected to buy a ticket had to turn to some other sales idea to write business.  And then, mathematical and insurance illiteracy set in…

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Life Insurance underwriting can be a somewhat cryptic topic.  Today, we'll talk about what the is needed for underwriting, and how decisions get made.  Most of this discussion will focus on what a client will face when it comes to underwriting, both financial and medical (medical being the much bigger and more labor intensive part to the process).  So after you've signed the application and sent the agent away, this is what comes next.

Hopefully this will give you a better idea of what the terminology means when an agent tells you something like “The next step is a paramed exam with blood and urine.”

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