Insurance - suffering Whole Life

https://www.forbes.com/sites/investor/2012/09/13/retirement-disaster-looms-for-universal-life-policyholders/#4c4a31ad23e1

https://www.wsj.com/articles/cost-of-universal-life-insurance-stings-retirees-1439172119

http://perry.kundert.ca/range/finance/ul-blows/

http://www.investopedia.com/articles/personal-finance/021716/universal-life-insurance-hidden-dangers-retirees.asp

http://www.investopedia.com/articles/fa-profession/090816/cash-value-vs-surrender-value-what-difference.asp


UNIVERSAL LIFE POLICY:

4.3.5 Guaranteed vs. adjustable mortality deductions
The discussion so far has assumed that the yearly renewable term (YRT) or level cost of insurance (LCOI) costing schedule is set when the universal life (UL) policy is issued, and that it is guaranteed for the life of the policy. While this may be true, it is not always the case.
UL policyholders would probably prefer the certainty of knowing exactly how mortality deductions are going to be calculated in the future. This is particularly true for YRT costing, which already increases dramatically at older ages. However, the insurance companies would prefer to be able to adjust the COI schedules to reflect their actual experience with mortality, investment returns and administrative expenses. Agents should understand policies to determine whether the costing schedules are guaranteed for life, or subject to adjustment, and they should advise clients accordingly.
4.3.5.1 Open-ended or restricted increases
Where UL policies are subject to mortality costing adjustments, there is a further distinction between open-ended and restricted increases. A policy that allows open-ended increases in mortality costs results in significant risk for the policyholder. Most adjustable policies place a restriction on increases, such as limiting increases to 25%, 50% or 100% of the original schedule, or a specific dollar amount.

4.5.4.1 Policy illustrations
UL policy documentation typically includes a policy illustration, which is a chart or table that shows projected values for the premiums, mortality deductions, investment account value, cash surrender value and death benefit for each year in the future. However, these projections are only intended to demonstrate how the policy works, and are not a prediction of guaranteed or expected performance.
UL policy outcomes are very sensitive to even small changes in investment performance, particularly over the long life of these policies. To highlight this sensitivity, most policy illustrations now include at least two sets of projections. The first will be at the current or requested rate of return, and second will be based on a slightly lower rate of return.

Policy illustrations are usually accompanied by strong disclaimers, and agents must ensure that policyholders understand that the projections are not predictions of future performance. In fact, the policyholder is typically required to sign the illustration, acknowledging that he understands the limitations of the illustration.