ATTORNEY NEWSLETTER
California life insurance and annuity fraud attorneys warn consumers that insurance policy illustrations may be misleading and create heightened expectations for unrealistic results. Illustrations can be a useful way to demonstrate and understand how a policy, such as an indexed universal life policy (IUL), may work. However, they often create an expectation that the policy will work exactly the way it is portrayed in the illustration, which California life insurance and annuity fraud attorneys say is unlikely.
Life insurance policy illustrations often assume a conservative crediting rate, but California life insurance and annuity fraud attorneys say that it is important for consumers to look more carefully at how credit rates are actually determined from volatile equity index returns. Life insurance policies, particularly indexed universal life (IUL) policies have become extremely complex. Many buyers of indexed universal life insurance policies are not only buying for low-cost protection, but also to accumulate cash value.
Indexed universal life insurance policies give the policy holder the opportunity to allocate cash value amounts to either a fixed account or an equity index account. The vast majority of policy holders, an estimated ninety percent, choose Standard & Poor’s 500 1-year “point-to-point” index as the basis on which the annual crediting rate will be determined. The math used in illustrations usually assumes constant rates of returns, while in reality there can be significant fluctuations in the index in rolling 365-day periods.
California life insurance and annuity fraud attorneys say that although policy illustrations can be a useful tool to visualize how a policy can work in a specific scenario, they do not necessarily illustrate how the policy will work in actuality, and as a result create an overly optimistic expectation of the performance of the policy.
Some of the life insurance companies that sell indexed universal life insurance policies include the following: Minnesota Life Insurance Company; Penn Mutual Life Insurance Company; Midland National Life Insurance Company; National Life (Vermont) Insurance Company; AXA Equitable Life Insurance Company; Lincoln Financial Insurance Company; Pacific Life Insurance Company; Transamerica Life Insurance Company; John Hancock Life Insurance Company.
Evans Law Firm, Inc. handles insurance fraud cases and lawsuits, as well as banking, consumer, and annuities fraud and lawsuits. If you have purchased an indexed universal life insurance policy and would like to determine whether it was a suitable investment for you, please contact Evans Law Firm, Inc. at 415-441-8669 or via email at info@evanslaw.com for a free initial consultation. We typically handle insurance and annuity cases on a contingency. Some of the life insurance companies that sell indexed universal life insurance policies that have illustrations include: Minnesota Life Insurance Company; Penn Mutual Life Insurance Company; Midland National Life Insurance Company; National Life (Vermont) Insurance Company; AXA Equitable Life Insurance Company; Lincoln Financial Insurance Company; Pacific Life Insurance Company; Transamerica Life Insurance Company; John Hancock Life Insurance Company.
