When Did Universal Life Insurance Start?
37376 POINTSview profileDavid G. Pipes, CLU®, RICP®Business Development Officer, T.D. McNeil Insurance Services, Fresno, CaliforniaA component of a whole life policy is an accumulation of funds to insure that the policy will pay the face amount throughout the lifetime of the insured and yet the premium will remain level. In the 1960s there was unrest as the stock market surged people thought they could do better managing those funds than the insurance company could, thus the Universal life policy was designed. It gave greater flexibility and a separate fund to develop cash value. None of this was possible before wide spread use of computers. Today there are life insurance policies where the individual can select funding vehicles.Answered on August 5, 2014flag this answer
21750 POINTSview profileJim WinklerCEO/Owner, Winkler Financial Group, Houston, TexasThat is a great question! Universal life policies were thought up in the 1960's, and became popular in the late 60's, and early 1970's. They were designed to capitalize on the rising stock market values, as normal life insurance could not match the returns investors could get from the market. The policies were created so the buyer could put in their premium, and invest it in the market. The next step was the variable UL, which very closely mimicked a mutual fund in the way it was managed. What many people learned to their dismay was that when the market dropped, their insurance went belly up, and they no longer had coverage. While these policies have been retooled to be a little safer since then, they can still be a very risky way to go. I hope that helps, thanks for asking!Answered on August 6, 2014flag this answer
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