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Life Insurance Carriers Do Not Care About You — Here Is What to Do About It
After more than 50 years in the life insurance industry, one lesson stands out above all others: your life insurance carrier does not have your best interests at heart. That may sound harsh, but the evidence speaks for itself. From misleading sales illustrations to steadily rising internal costs, the insurance industry has a long track record of prioritizing its own bottom line over the well-being of the people it insures.
The Problem With Sales Illustrations
When you first purchased your life insurance policy, you were likely shown a sales illustration — a projection of how your policy would perform over time. What most policyholders do not realize is that these illustrations are almost never accurate for permanent life insurance products.
The projected dividends, interest credits, and cash values shown at the point of sale rarely match what actually happens over the life of the policy. Carriers use optimistic assumptions to make their products look attractive, but once you are locked in as a client, reality sets in. Dividend rates are reduced. Interest credits shrink. And the rosy projections you relied on when making your purchase decision quietly fade away.
Rising Costs That Push Seniors Out
One of the most troubling trends in the industry is the deliberate increase of internal policy charges — particularly the cost of insurance (COI) rates within universal life and other permanent policies. These increases make it progressively more expensive for older policyholders to maintain coverage they have faithfully paid into for decades.
The result is predictable and, some would argue, intentional: seniors who can no longer afford the rising premiums are forced to surrender or lapse their policies. The carrier keeps decades of premium payments, and the policyholder walks away with little or nothing to show for it.
Additionally, many carriers have increased the cost of converting term life insurance policies to permanent coverage. This tactic limits the ability of term policyholders to exercise their conversion rights — and, in turn, reduces the number of policies eligible for life settlements.
Why This Matters for Policyholders
If your insurance carrier is making it difficult or expensive for you to keep your policy in force, you need to understand that surrendering your policy back to the carrier is not your only option. In fact, it is often the worst option.
When you surrender a life insurance policy, you receive whatever cash surrender value the carrier has assigned — typically a fraction of the policy's actual market value. The carrier benefits because it no longer has to pay the death benefit, and you lose the financial asset you spent years building.
A Better Alternative: Sell Your Life Insurance Policy
A life settlement offers a fundamentally different outcome. Instead of surrendering your policy to the carrier that has been working against your interests, you can sell your life insurance policy to a licensed institutional buyer on the secondary market. Life settlement cash offers are routinely several times higher than the cash surrender value — sometimes dramatically so.
For seniors in Florida and nationwide, a life settlement provides:
- Significantly more cash than surrendering or lapsing the policy
- A regulated, transparent process overseen by state insurance departments
- Tax-favored treatment of the proceeds
- Freedom from ongoing premium payments that continue to climb
Protect Yourself With an Independent Broker
An independent life settlement broker works exclusively on behalf of the policyholder — not the insurance carrier and not the buyer. This means your broker's only goal is to secure the highest possible cash offer for your policy by marketing it to multiple competing buyers.
Do not let your insurance company dictate the terms of your financial future. If your premiums are rising, your policy performance has declined, or you simply no longer need the coverage, explore a life settlement before making any decisions.
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Saul L. Appel, CLU®, ChFC® is the President of Appel Financial, Inc. — an independent life settlement broker representing most major buyers of senior life insurance policies. With over 50 years in the industry, Saul works with individuals, families, brokers, and agencies nationwide. 📞 617-610-1898 | appelfinancial@gmail.com | www.appellifesettlements.com