Nearly 20 years ago, the insurance industry responded to consumer problems with old fashioned universal life contracts by creating the no-lapse guarantee UL. Rather than a policy based on the concept of maintaining cash value in the contract, a no-lapse UL gives the client another method to keep their policy in force. If the client pays their premium every time, on time, takes no loans and no withdrawals, the policy will always remain in force. It does not need to have cash value. This has been by far the most popular UL we’ve seen at Financial Brokerage over that time period. It’s about a third the cost of a traditional whole life product but still has the same coverage and premium guarantees.
So, what risk is there for the client? If a client is going to maintain this contract for a few decades, what are the chances of them missing a premium somewhere along the way? If that happens they void their guarantee.
What can we do about this? Take a couple minutes to learn what you can do to save your client’s contract and save your bacon as well.