The Riskiest Business: Taking Chances with Life Insurance

The Riskiest Business: Taking Chances with Life Insurance

The author of our article, an accredited specialist in the insurance business, tells the tale of helping a customer patch up a leaky universal life plan.

Let’s see how he handled the task and learn a few lessons from a master.

The customer was referred by an estate planning lawyer, who wanted a specialist to examine his client’s life insurance. The $1 million plan, which covered husband and wife, was initiated more than twenty years ago and needed some work due to underfunding. The customer had received advice on the matter three years ago, but wanted a second opinion.

Our writer commented that he is always happy to review an industry colleague’s work and if it is good, let it stand pat. He doesn’t make changes simply to boost his reputation or fees. But in this case, he took honest exception to the earlier advice.

Both of the clients involved were quite advanced in age at 83 and 86. The earlier analyst thought there was little to be gained from paying further premiums on the policy, because there was so little chance of their living beyond the timeframe in which the policy would still pay out. This seems like reasonable way to save the couple some money. But was it?

Our writer thinks not – in fact, he believes it’s irresponsible. Better to keep paying premiums – the couple could afford them – and be assured in the event that they outlive the predictions, which after all are largely based on statistical tables. We know how life can deal with those. Taking chances to save a few dollars is no better than playing Russian roulette, life-insurance style, he says.

For more information, please read:
Life Insurance Russian Roulette | Wealth Management


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