Life Insurance: The Real Bottom Line
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When life-insurance agents call, one of their main selling tools is the illustration, that daunting set of numbers that estimates how much the cash value of a policy will increase each year. The trouble is, the estimates are usually based on current returns. So if interest rates fall, you can owe more money just when you think your policy is paid in full.
A handful of insurers, including Phoenix Home Life, New England Mutual, Connecticut Mutual, and Manufacturers Life, are trying to correct the problem with more realistic disclosure materials. The new illustrations show what a policy would be worth if rates, which determine how quickly cash builds, remain the same, rise, or drop.