Owens Group has never sold Variable Life policies because of our belief that life insurance should be a guaranteed part of your financial portfolio and not one that is subject to investment market risk.
Often these policies were sold with the assumption that premiums would disappear, that investment gains would result in increased death benefits and that the policies would last for a lifetime. In practice, the recent sharp financial market declines, combined with the long-term low interest rate environment and the non-guaranteed nature of these polices have made it virtually impossible for many of these existing polices to deliver on their promises, even if the markets recover.
By now, most consumers are convinced that consistent 8% to 10% annual returns are simply not achievable in the market over a sustained period of time. Yet those unrealistically high returns are exactly what many existing variable life policies would need to earn in order to match their original projections. In reality, the longer the insured lives, the more risky the policy becomes because the annual policy mortality charge increases so sharply over time.
Some of our clients have prudently solved this problem by obtaining new guaranteed coverage with a tax free exchange of the existing values from the risky variable policies. Since both premiums, if any, and death benefits are guaranteed, our clients who purchase these new policies know exactly what their heirs will receive no matter when a claim occurs. This provides real “peace of mind” for everyone concerned. Please contact Denise Kligman in our Life Division for a complimentary review of your existing policies.