Bootleg whole life insurance

A few years ago, I did a webinar where I explained some of the basics of whole life insurance. I also answered several questions and something that came up in the chat box was how someone had bought a life insurance policy and their premiums had increased over time. 

They said they owned a whole life policy but… whole life premiums generally don’t increase over time. 

Most companies that sell whole life sell guaranteed level premium policies unless the person is sick or has some special situation where they en up with an indeterminate premium. 

But that’s rare. Very rare. 

More than likely, the person actually owned a universal life insurance policy. These policies have “flexible” premiums. Meaning, you can choose how much to pay each month. You could pay nothing, or… pay an entire year’s premium. 

The cost of insurance is deducted from the cash value account monthly. As long as there’s money in there, the insurer doesn’t really care how you pay the premium or how much. 

Now… here’s where things get trick. 

Many moons ago, life insurance agents started referring to universal life as “whole life” or “kinda sorta like whole life insurance” because folks were unfamiliar with how it worked or what it was but… they were very familiar with whole life insurance. 

Fast forward to today… there are a bunch of people wondering around with universal life policies who believe they have whole life policies. 

Anywho, what does this have to do with the price of tea in China?

Only that if you plan on buying anything other than whole life insurance, know what you’re buying. Lots of info on the Interwebs, but my website is filled to the gills with everything you need to know, based on about 15 years of research, experience, info from textbooks (translated into English for you) and also hard-to-find resources. 

Of course, you are free to ignore everything I written here (and elsewhere) and go out on a limb and see what happens...

David Lewis

This post brought to you by David Lewis, The Rogue Agent. David has been a life insurance agent, and worked with some of the oldest and most respected mutual life insurance companies in the U.S., since 2004. To learn more about him and his business, go here.