A New York and New Jersey Lawyer Who Represents Policyholders and Beneficiaries in Life Insurance Denial Cases

Reuters reports that New York insurance regulator Benjamin Lawsky has launched an investigation into indexed universsal life insurance products. These are life insurance policies that invest the cash value in index funds such as the s&P 500.

The issue is with how the policies are marketed to the general public, as it is suspected that prospective customers are given illustrations that overstate performance. They probably sound a whole lot more attractive than a policy that invests more conservatively. Apparently, these types of policies are the fastest growing component of the life insurance industry.

Although not a life insurance salesman, I will comment from the perspective of a policyholder attorney – these types of policies may be appropriate and appealing to a certain market share who is willing to accept risk, but they may not be right for everyone. Many people expect a solid, dependable performance from their life insurance policy – meaning, that it will not sputter out before maturity due to a depletion of cash value, and that it will be there for their loved ones.

As always, life insurance applicants should carefully ask questions of their agents and, importantly, read the fine print.

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