Let us give you a real life example from Greenway, so you can get a better understanding of policy implosion and how we can help you avoid it:
DID YOU KNOW YOU CAN REFINANCE YOUR LIFE INSURANCE POLICY?
The first fact you need to consider is life insurance has really come a long way from the plans and policies written even 5-6 years ago, much less policies that were written over 20-30 years ago. In Life policies today, many of these policies come with additional coverage options called "living benefits." These types of benefits include accelerated death benefits, which means you get half the death benefit paid up front if you come down with a dreaded disease (such as cancer). They come with Long Term care benefits where you can get 2% of the death benefits paid out monthly, which you can use to pay the nursing home. They also have Terminal Illness coverage so you can get the entire Death benefit paid up front so you can go on that dream vacation to fulfill your bucket wish list, and/or use funds to prepay funeral expenses to get better rates on services.
However, if you purchased a policy years ago, before these types of options were really available, our advice is that you are missing out, and probably paying higher mortality costs than you could be today on top of it! You see, mortality rates were different years ago. Older policies were purchased at a time when the age of death was lower and thus, mortality costs (rates associated with age of death) kicked in much sooner. For example, if you have a policy that was written in 1995 and you’re a male age 68, your current plan has premium charges as if you should have already passed away, since 68 years was the age of mortality for males back in the 90's (age 74 for females). So your plan now will exponentially start to get more expensive every year you live past this age.
However, people are living longer these days. Current age of mortality is 80 for males and 86 for females. However, Insurance companies are not adjusting mortality costs in the premiums they are charging to their clients insured prior to this change. Why? Because legally they don't have to.
This means you could be in danger of policy implosion if you don't get a policy review, and guess what...your carrier is NOT going to warn you!
Policy Implosion is a REAL insurance term that insurance agents use. But, your carrier is NOT going to tell you about it, instead they are going to find a way to use it to their advantage. Policy implosion is the dirty little secret of many life policies written in the market place today.
THAT'S POLICY IMPLOSION.
Your out of death benefits and coverage after paying on a permanent plan for years!!!
Sound fun? No!
Get a Policy Review ASAP
This is mandatory: All Policies Need to be reviewed.
As already described, with medical technology advancing at a rapid pace, health conditions which used to be reason for declined underwriting are now being covered by many different life carriers. In addition, Life companies every 3 years or so are now forced to go back and review new mortality tables and lower life expense tables so the overall costs on the life plans they offer. In most cases, permanent life polices even written as little as 7-10 years ago, are dramatically different than new policies written today. These policies should still be reviewed for future projections on potential implosion.
Believe it or not, one of the main passions for Greenway is to alert everybody and anybody who has a life insurance policy that they should be reviewing their policies at least every few years to make sure their plan is not in danger of imploding. As time goes by, rates will change. Mortality age will more than likely change. The younger you are when you take out a policy the more likely it is you will eventually be stuck in this situation.
Why you should contact Greenway for your policy reviews...
You need someone you can trust who knows about implosion AND IS NOT AFRAID TO TALK ABOUT IT WITH YOU. The beauty of going through a broker versus a specific carrier is that a broker can shop around and get you the best rate. And, the beauty about going through Greenway is that we take an honest approach and will make sure to help you avoid implosion in any way we can. We don't know any other agency that does this and I bet you don't either. This is just one of the many reasons you can trust us. No matter if we can help you now or not, we are always available to provide you a FREE review. Let Greenway be who you call.
You can refinance important assets such as a car or mortgage, so why wouldn't you be able to refinance such an important asset and investment like your life insurance policy? But, of course, your carrier is NOT going to tell you this. Why would they? They're going to lose you and those interest rates they have been banking on!
IS IT TIME FOR A POLICY REVIEW?
GET YOUR FREE POLICY REVIEW FROM GREENWAY TODAY!
That's right, anyone can look into and possibly qualify to refinance their policy!
So, what exactly do we mean by policy implosion?
What do we mean by imploding? Well, we mean lapsing coverage after paying premium for years and years, thinking your policy is safe, then you get a notice in the mail out of nowhere that your policy is going up dramatically in cost, and you must pay the new increased premium to keep the plan going.
Carriers Dip Into Your Cash Values to Pay High Premiums
Back in the 1990’s, with more relaxed regulations on the carriers, Universal life companies were illustrating polices which built cash value, and the plans were illustrated paying 9-10% interest rates. Let’s assume a plan was costing 150.00 a month, the cost of insurance is maybe 50.00 a month for 100,000 death benefit and 100.00 a month went into building cash value. Well, the 100.00 a month is earning a 9% interest growth. Now fast forward 15 years, the policy is now paying 4.5% interest and the cost of insurance on the same 150.00 your continuing to pay is now 120.00 a month. So now you only have 30.00 a month going into building your cash and you’re only earning 4.5% interest on the cash. Now let’s fast forward another 10 years, now your policy is only paying the bear minimum interest of 3% and the cost of insurance for the same death benefit because your now 25 years older is 250.00 a month, now you have negative debits going against your cash value. Once the policy runs out of cash, your policy trajectory of premium could be whopping 400.00 a month, and you get the bill in the mail as soon as you run out of cash in your policy.
Make No mistake about this scenario, even though this is hypothetical, the 2 product illustrations we give are real. This is playing out on life insurance plans all across America today and it is very sad. What's even more sad is that most people in this situation don't even know that their premiums have skyrocketed and their cash value is paying for the difference! They don't educate themselves on their policy nor do they check in on it to see how it is operating. It is this lack of understanding that allows carriers to pay off your premiums using your cash value and then hit you with the full bill when the value runs out. Now, if you have a more basic plan with little to no cash value, then you expect this bill much sooner!
Personally, we at Greenway think it is criminal what some of the carriers are doing to their policyholders. However, since the things they are doing are considered legal, at the end of the day it is up to the buyer to be educated on the subject at hand. That is where Greenway comes in. It is our sole mission to help you understand life insurance and give you the best policy fathomable because you and your loved ones deserve it. At Greenway, we want to keep your business for life, so we are not in the business of cheating your loved ones out of your hard earned policy.
How to Avoid Policy Implosion:
Use Your Cash Value
Just like a 401K rollover, in a lot of cases, you can literally rollover your cash value to a new life plan, dramatically increasing your death benefit, while also increasing benefits such as adding a built in long term care plan. The best part is, you can do all of this while saving money on your monthly premium! This takes you from heading towards implosion and losing your cash value, to getting a new and improved, guaranteed plan with locked in rates for the remainder of your life plus added living benefits while using your cash value!
So, you can either have your cash value dipped into to pay the increase in your premium with no guarantee it will last you the remainder of your life, or you can get a policy review asap and potentially take out a new plan and get priced at the new age of mortality (which is age 80 for a male and 85 for female) and never have to worry about this again!
Use your cash value or lose your cash value...we think this one is a no-brainer!
BUT... if you get a policy review from a licensed insurance broker you could...
Part Two:Greenway Saves!
Part One:Headed Towards Policy Implosion
Male / Age 60
REAL LIFE EXAMPLE FROM GREENWAY
A healthy male, currently age 60, purchases a whole life insurance policy for 100,000 back in 1990 when he was only 34 years old. It is now at a total death benefit of 137.605. His annual premium is $1,516.00 or $126.33 a month. This man has a cash value of $48,779.22 that has accrued over the 26 years he has had this policy. He also has a smaller policy of 5,848 with a cash value of 5,017. His premium on the smaller policy is about 9.57 a month. So, altogether this man has about $143,453.00 in death benefits with about $53,796.22 in cash value and pays $135.90 a month for all of this. Obviously, this man is in a position to live for many more years, but because he purchased these policies when the death rate was age 68, in only 8 years time his premium is going to skyrocket because he is going to be surpassing his projected age of death. How much you ask?
Well, each year he surpasses age 68 will cost more and more. So, age 69 could be $500 more annually, age 70 could be $700-800 more annually, and by age 71 he could be paying well over $1,000 more annually. This practically doubles his monthly payment just to keep the same old benefits he has had for years! And, with each year that passes the premium will only get higher, it will never level off. This means it is very probably that his entire cash value could be gone by the time he is 80 and instead of getting to keep his benefits when he needs them most, he will have to lose his policy because he won't be able to afford it.
These estimates are VERY REAL based off real industry interest rates, projections and trends. How do we know, because the actual life insurance carriers provide them when requested! Again, this is where a lack of knowledge from the policy holder is used to the carriers advantage.
Not to worry, even if you don't have any cash value, it is still possible to get a better policy and premium. There are many different types of policies available today. There are also many factors that will help us determine which, if any, are better options. You age, health status, and type of policy are all going to play into your review. But, as we stated, our policy reviews are completely free, so there is no reason you should feel hesitant to at least have your policy looked at by a licensed agent at Greenway to see if there is anyway we can get you on the road to a better plan and pricing!
AVOID POLICY IMPLOSION...
So, what if I don't have cash value?
So, how exactly is this possible?
Greenway Low Cost Life Options © All Rights Reserved.
As stated, the above example is a real life example from Greenway, so of course we would love to show you just how we were able to save the gentleman above from inevitable policy implosion!
Well, after giving him a free policy review, one of our agents was able to determine that he qualified for a Guaranteed Universal Life Insurance Policy with a death benefit of 300,000 and an annual premium of only $688! This is no joke, we took this guy from paying $135.90 a month for a little over 140,000 in death benefits, to over double that amount in coverage for less than half the cost! Plus, we were able to get him long term care which means he will get 2% of the death benefits paid out monthly to use for end of life expenses such as hospice, nursing home, etc.
And, the best part is, his cash value from his old policy is going to pay off his premium for him for over a decade! This means he gets all of this without having to pay a dime out of his own pocket for many years to come, and if he surpasses his cash value, he still will only have to pay $57.33 a month until the remainder of his days to keep his coverage. This is a fixed premium.
You see, these types of options simply were not available to this man 20+ years ago, but the beauty is that his dedication to his old policy afforded him the opportunity to get an even better one before it was too late. That is the key, getting the review before it is too late. Now his cash value was put to good use instead of paying towards an out of date policy that was taking him for a ride. This is just one of the many countless people we have been able to help avoid policy implosion. No matter your gender, age, or ethnicity, we are here to help you if you have any concerns about policy implosion happening to you.