BUSINESSWEEK ONLINE : AUGUST 30, 1999 ISSUE
BUSINESSWEEK INVESTOR

Anatomy of a Life Insurance Implosion


UNIVERSAL LIFE POLICY: Bought by a 41-year-old man in 1984

DEATH BENEFIT: $1 million

INTEREST RATES AT TIME OF PURCHASE: 12%

ANNUAL PREMIUM: $4,720

Now, the holder is told his policy will lapse when he's 68--not at age 95, as originally projected--because it is earning only 6% interest.

THE POLICYHOLDER'S OPTIONS:

-- Boost annual premiums to $14,184.
-- Cut the death benefit to $401,000.
-- Let the policy lapse at age 68.


DATA: LOW LOAD INSURANCE SERVICES INC.


_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _


RELATED ITEMS
Life Insurance: So You Think You're Covered

TABLE: Anatomy of a Life Insurance Implosion



INTERACT
E-Mail to Business Week Online

 
Copyright 1999, Bloomberg L.P.
Terms of Use   Privacy Policy