The replacement of paid-up whole life insurance policies by
Variable Universal Life (VUL) insurance policies has seen many retirees lose a
lifetime of savings in a matter of years, due to various of the hidden cost
features of Variable Universal Life insurance.
Whole life insurance policies offer life insurance coverage
for the lifetime of the policyholder, with guaranteed premium, death benefit,
and cash value schedules. The underlying
value of these policies is generally based on long-term, predominantly stable,
and fixed-income holdings.
Variable Universal Life insurance policies, on the other
hand, can include various sub-accounts and investments based upon the
performance of the stock market, with sales pitches oftentimes utilizing sales
illustrations assuming a gross investment return of as much as 12% -- an amount
which history has shown is generally unsustainable for long-term whole life
policies and likewise unsustainable in the equity markets.
The cash value of a Variable Universal Life insurance policy
is based upon the investment performance of the underlying investments, such
that there is generally no assurance of a guaranteed cash value. Also notable, Variable Universal Life
insurance policies are deemed to be securities for purposes of the federal
securities laws, given their underlying holdings in securities.
Unfortunately, many seniors have been talked into replacing
paid-up, guaranteed whole life insurance policies, with considerable cash value,
by Variable Universal Life insurance given the favorable rate of return
illustrations (as high as 12%), without being advised of the lack of guaranteed
cash value, lack of a guaranteed death benefit, and no assurance of fixed
premiums to keep the policy, cash value, and death benefit in place.
We offer a free consultation to investors who feel they have
been victimized with the sale of Variable Universal Life insurance policies,
based upon the recommendation of the representation of an existing whole life
The Law Offices of
Timothy J. O’Connor is one of the only law firms practicing securities law in
the Tri-City Capital District of