Are these statements - Misleading or Not?

  • Whole (or universal) life insurance policies are considered permanent.  (p32)
  • As long as you pay the premium, the policy is in effect.  (p32)

2015 Version - Consumer Action Handbook, published by USAGov, part of the U.S. General Services Administration’s (GSA) Office of Citizen Services and Innovative Technologies.

Universal life is permanent insurance......

Additionally, the insurer usually guarantees the cash value <SIV> will not fall below a minimum value. <Bonk:  Would it be more accurate to say the Interest Rate <i> will not fall below a minimum?  The cash value <SIV> will be lower if the <P1+i> is less than the <P2>.   What I see is Advisors in legal cases and books etc. talking about using an IUL policy to fund retirement.  The wording they use is similar to the wording in the paper, which doesn't take into account the <P2>.

The cash value <SIV> of the policy can also be used to pay the term insurance portion <P2> of the policy.  <Bonk:  Would it be more accurate to say "is used" instead of "can be used"?>  P1->SIV->P2

2013 - NAIC - State of the Life Insurance Industry: Implications of Industry Trends

JESSE M. SCHWARTZ: Why are people so reluctant to call Total Life <Universal Life> permanent insurance?

MYRON H. MARGOLIN:

  • Universal Life type products are, I suppose, permanent.
  • It is a semantic question whether they are permanent life or not, but clearly they are not the traditional cash value products as we have known them...

1981 - THE FUTURE OF PERMANENT LIFE INSURANCE, Society of Actuaries