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Does the policy have an annual fee that has been subtracted from the annual premium?
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You didn't post your numbers, but I know that pretty much all the policies I design will have more cash value by around year 10 than total premiums paid in, sometimes sooner.
As far as letting the policy pay for the premiums, unless you are in a situation where you can't afford the premiums...I personally think that is not a good idea. Now if you are planning to retire at this point, well time to examine your options.
The point I was making is if they were cruising along previously, you want to check their site out for any information on any single event that would have reduced that expected number. A large write off, did they "buy" another company, is there a one time thing they did that would effect how much gets paid out? If there is, then you have to figure it is it a bad thing long term or a good thing long term.
It would help if you could tell us what type of policy you bought. thanks.
My wife and I both have Lafayette Life whole life insurance policies that have been in effect for 10 years. For the first time in many years, the cash value and death benefit increased less than the premium amount. I thought by now the CV and death benefit would always go up by more than the premium. I asked my agent, and she is looking into it. I need an answer to help decide whether to keep paying the (hefty) premium or to stop paying and let the premium be paid by the policy.
For the last several years, I haven't minded paying the premium, thinking that the CV was increasing by more, but this new wrinkle has me concerned.
I hate to make a blanket statement here, but if designed correctly it really shouldn't be happening. Typically even the guaranteed column should have positive gain here. There is one scenario that might make that happen that i can think of, but again, only if there is a design flaw.
Do you have the original illustration?
Just a guess, but, I would guess it has to do with Dividends and not the guaranteed cash values. There is more to this than we are being given. I would like to hear what the agent comes back with and what the inforce looks like.
Be interesting for sure. As I said, the guaranteed values should be enough to increase cash by premium in 10th year +.
Also could be the term rider structure. Not sure which one they used, but if illustrated it longer than rider, for instance 10 years on a 7 year rider, to avoid MEC, the term rider cost could be eating up the growth. Some companies will eat that if you pay it from policy values, but if you don't, it's coming from your premium dollars.
I did not see any mention of a term rider. Wonder if it could not be a UL?
I did not see any mention of a term rider. Wonder if it could not be a UL?
That's why I'd like to see it. We've reviewed lots of these things and many times the client would respond to a term rider question with "What is that?".
I'm going to hold my tongue till I hear more...
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A Lafayette UL that is 10 years old wouldn't have increased more than premium up until now.
Hope op comes back. Got me intrigued.