Evolution of life insurance policy products

Nov 15, 2010

Life insurance products have changed over time.

Life insurance products have evolved over the years, from whole life offers to universal life policies that provide premium guarantees.

In blog post for the Atlanta Journal-Constitution, certified financial planner Cass Chappell gave an overview of how life insurance products have changed. For example, term policies were popular in the '80s and '90s because they allowed consumers some protection while letting them invest other available funds.

"The idea was that at the end of the 20-year period, you would have accumulated a large sum of money in the investment account and there would no longer be a need for life insurance," Chappell wrote.

However, certain assumptions made with this plan, including investment returns, meant this strategy didn't always work. Other options began to spring up, including universal life insurance.

This still involved some risk in terms of interest rates and credit ratings, so companies began to offer no-lapse, premium-guarantees for universal life insurance products. Consumers could take cash value and convert it into an assurance the policy would remain for the desired amount of time.

Regardless of the type, a recent survey of employees showed life insurance is seen as an important financial investment tool.

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