Nationwide suspended underwriting on coverage over $1,000,000 for one of the universal life (UL) products due to “improper use”. Nationwide did not elaborate, but this could be due to stranger-originated life insurance which prompted a similar restriction in 2010 sales for individuals over 65 with face amounts over $100,000.
Looking into what’s new in the dubiously ethical world of investors buying life insurance policies, it was a surprise to see that Betty White has clocked over 1 million views with a video pitching life settlements.
I wonder what her late husband Alan Ludden would have thought. Betty White’s video opens at the Los Angeles Zoo. A walkway there is named in Ludden’s memory. As a kid in the 1960’s, I developed a good deal of respect for his intelligence and warmth watching him host the G.E. College Bowl and Password.
Policy holders considering a life settlement should be aware of all their options to maintain their coverage for their beneficiaries. Not all of those options might be given by a life settlement agent, called a viatical settlement provider. This article by JJ MacNab gives a good overview. Viatical settlements requires a separate license for agents. To make sure of an objective overview, ask a life insurance agent that is not licensed for life settlements for options to retain or replace coverage. Ultimately, find an agent that holds a high standard in maintaining their fiduciary responsibility to advise and act in the policy holder’s best interest.
Here are some alternatives to selling your life policy:
Borrow from the cash value to pay premiums
Accelerate a portion of the Death Benefit (if terminally ill)
Replace the coverage and either taking out the cash surrender value or roll it over in with a 1035 exchange
Beneficiaries taking over ownership and making premium payments.
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