Life & Health Insurance/Universal Life


QUESTION: We purchased a $100,000 Universal Life policy for my husband about 20 years ago when he was 48. Though our agent was friendly enough, we always experienced communication problems with him, and nothing was ever mentioned about the potential result of paying the monthly premiums--we are now to the point where a considerable cash value has built up (over $17,000) but that money cannot be accessed except through a loan, and it will also never be added to the death benefit. It is true that the build-up now allows the policy to remain in force without monthly premiums, but the total amount built up is far in excess of what is actually needed to pay the insurance cost.  Somehow this feels like a "gotcha" buyer-beware mistake we made with no remedy. Is this correct or is there something we are not seeing? Did we in fact make a mistake and if so, what exactly? We are North Carolina residents.  THANK YOU immensely for your time and expertise!

ANSWER: I'm not aware of any UL policy where the cash value cannot be accessed -- the products our agency sells allow for that and we use as a retirement planning tool.  Let me check into something for you on this and I'll be back in touch. Lee

---------- FOLLOW-UP ----------

QUESTION: Lee, thank you for your reply so far. We will be eager to hear what else you may find on this topic. It does sound odd we realize, but a number of calls to the corporate headquarters have all confirmed what is written in our initial question. Thank you again very much.

Is your husband in good health now?  Of course as we get older, such insurance costs more and more;  what I'm exploring is whether a tax free exchange to something more suitable would be in order.  Let me know on the health condition, also has he used tobacco in the last 2 yrs?  Any health problems?  Might make sense to e-mail me off line as this is a public forum;

steinway at azbar dot org

let's see if you can be walked out of this policy into a better arrangement.


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Lee Horner


Questions invited on "hard to insure" life cases; also universal life with living benefits, term with "money back" premium refund feature, and using universal life for retirement planning.


Estate Planning Attorney since 1985; practicing in California and Arizona, and independent life insurance agent since 1975 specializing in "interesting" or "hard to insure" life insurance cases and also tax free retirement planning.

AHEPA, Freedom Equity Group and the Farm Bureau.

BBA in Business Management from Univ of New Mexico; Juris Doctorate in Law, Lincoln Law School of Sacramento, CA.

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