Many ageing Americans are facing a significant unexpected financial challenge: Sky-high premiums for "Universal Life" insurance policies.
As the Wall Street Journal recently reported, holders of "Universal Life" policies – which were especially popular in the 1980s and are often structured to depend heavily on strong investment returns – are struggling to pay costly premiums to make up for years of low interest rates. The article recommends that policy holders "consider working with an agent to sell the policy on the life-insurance secondary market,"
"Financial concerns shouldn't loom large during our golden years, but the long period of historically low interest rates has put tremendous financial pressure on 'universal life' policyholders," says Jon Sabes, CEO and co-founder of life settlement provider GWG Life, LLC.
The cost of insurance premiums is a growing problem as the US population gets older. According to a 2014 Census report there were 40.3 million people aged 65 and older in 2010. The percentage of the population aged 65 and over among the total population increased from 4.1 per cent in 1900 to 13.0 perc ent in 2010 and is projected to reach 20.9 per cent by 2050.
"Fortunately, effective solutions exist for many people who are 65 and older. I encourage policyholders struggling to keep up with unaffordable premiums to consult with their financial advisors to discuss options for relief, such as life settlements," says Sabes.
