Life Insurance Asset Management

It’s an unfortunate fact that many policies will simply not perform as their policy owners expect them to, and yet;

• Many policy owners, insureds, and trustees are not aware of the risk that the policy they own will not remain in force for their entire life.
• People manage their Investments, they manage their real estate, but when it comes to their Life Insurance, they buy it, and then rarely look at it again. More often than not, this “hands off” approach will create an underperforming policy that can expose them to significant financial risks they haven’t even considered.

One of our services is to help create awareness of where our clients stand in relation to managing their Life Insurance assets and provide options that will enable them to make much better decisions about how to manage those very important and often overlooked assets.

We’ve found that the main problem that many people have with Universal or Variable Life Insurance is often a lack of awareness of how their policies work, and as such, many are simply not aware that their policies could end up underperforming, or may not even work at all — at least not as they expected when they first acquired them.

An example is that many contracts do not have guaranteed death benefits, yet many people are not aware that the policy they are counting on may not even pay out in the event of their passing.

Think of a policy in the form of the Bathtub

What goes into it is premiums and interest, or policy earnings that will be credited — that is like the faucet pouring the water into the policy.

The drain is the charges that come out of the policy — the cost of insurance (mortality charges), and policy fees and expenses. As an individual gets older, the drain (the mortality costs) get exponentially higher and higher.

Some carriers are raising mortality charges (increasing the size of the drain) not because the cost of insurance or mortality charges are going up, but because the low interest rate environment, which most likely will continue to stay low for the foreseeable future, is causing the carriers to make less money on the premium deposited to them by the policyholders. This is causing them to raise the mortality charges, and ultimately that is costing the consumer.

This creates the perfect storm, as interest rates are low and have been for some time, and people are living longer, these policies that were purchased for the purpose of lifetime coverage now are in extreme danger of lapsing, leaving you in the bathtub with no water, coldly exposed to having a failed policy that might have a negative effect on your financial, business, or estate plan.

We can help. Depending on your situation, policies, and financial goals, there are always options and choices for how to resolve this problem. Here are a few examples: We may be able to adjust your current policy, consider alternatives, or even potentially exchange your current plan for a new one.

There’s no right or wrong way to solve the problem. The most important thing is that you don’t ignore the problem. Please do not close your eyes to what may very well cost you millions of dollars.

Registered Representative offering Securities through American Portfolios Financial Services, Inc. (APFS) Member FINRA/SIPC. Investment Advisory Services are offered through G&G Planning Concepts, Inc. which is not affiliated with APFS.  Strategic Wealth Advisors Network and Gassman Financial Group are not affiliated with APFS.

Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or American Portfolios Advisors, Inc.(APA) and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors.