Company Guide to Life Insurance Annual Statements
5 star rating: Lincoln National
Lincoln National Life Insurance Company has an excellent annual statement. The key information is clearly bracketed off in the middle.
POLICY EXPIRATION DATES – PROJECT EXPIRATION DATE
Interest and Cost of Insurance Current # Guaranteed
Planned Premiums Paid : Month, Year (eg. March 2075) Month, Year (eg. March 2043)
No Further Premiums Paid: Monthly, Year (eg. July 2017) Month, Year (eg. July 2017)
Note: Pay particular attention to the Planned Premiums Paid Current # Ask yourself: “How old will you be at this date?” Universal Life policies in danger of lapsing will have date you’re in your 60’s. 70’s or early 80’s. Any date that does not exceed your life expectancy is a big red flag.
Note: “No Further Premiums Paid” Guaranteed If you are in very poor health, you can reduce or discontinue payments because of shortened life expectancy.
3 star rating: Genworth
Genworth Life and Annuity Statement at least provides the key information, but poor marks for burying it at the end of the statement and not being highlighted or bracketed off.
Look for the “Forecast Statements” near the very end of the statement. They will read something like this:
Forecast Statement (non guaranteed basis): Your life insurance will continue until (month, day, year) if you pay no more premiums.
Forecast Statement (non guaranteed basis): Your life insurance will continue beyond (month, day, year) if you continue to pay your premiums in the same amount and frequency as you have been paying them.
Forecast Statement (guaranteed basis): Your life insurance will continue until (month, day, year) if you pay no more premiums.
Forecast Statement (guaranteed basis): Your life insurance will continue beyond (month, day, year) if you continue to pay your premiums in the same amount and frequency as you have been paying them.
Note 1st forecast: “Forecast Statement (non guaranteed basis) “if you continue to pay your premiums…” Ask yourself: “How old will you be at this date?” Universal Life policies in danger of lapsing will have date when you’re in your 60’s. 70’s or early 80’s. Any date that does not exceed your life expectancy is a big red flag.
Note 3rd forecast: “Forecast Statement (guaranteed basis) and “if you pay no more premium. If you are in very poor health, you can reduce or discontinue payments because of shortened life expectancy.
1 star rating: American General
American General Life Insurance Company has an poor annual statement. The key information is not provided. In what they have provided, look for:
Crediting Interest Rate:
New Premiums: x.xxx%
Guaranteed: x.xxx%
If those two figures are the same or close to being the same, and you have a traditional universal life product, it spells trouble for the long term viability of the coverage. If you have a lifetime guaranteed universal life, one of American General’s G products, then the new premium crediting rate is not a major concern. In the Policy Value Information section, the “Accumulation Value” is helpful if you are in very poor health. You may use your policy value to offset premiums. The “Cash Surrender Value”, besides taking out the cash, is useful if you are considering replacing your coverage with another permanent product. You can exchange the cash value into your new coverage.
To find out what’s really going on with your policy, request a “current illustration” from American General customer service (800) 231-3655. This will tell you how the policy projects over time, given the current premium and the current crediting premium interest rate. This report may be an eyeopener.
last revised: May 2011