Vol 5 No 4		May 2003

Katt & Company is a fee-only life insurance advising firm. We work with clients throughout the U.S. - primarily by phone, mail, email and telecopy. Typically, we assist clients buying life insurance, those who need existing policies reviewed and managed, and in support of litigation. We also assist clients with disability income and long term care insurance. The June 2002 Forbes magazine named Peter Katt as one of only four nationally recognized advisors, stating, "…advisers are well worth the money…[T]hese savants are working for no one but you…" For references please contact us.

Alert

So-called no-lapse-premium-guarantee (NLPG) policies have become a hot concept with many agents promising "rock-solid, unconditional guaranteed premiums." NLPGs are impressing agents, insurance buyers and their advisors. The financial media are also cheering on NLPGs as ideal for consumers because of lost confidence in permanent insurance due to poorly performing universal life, vanishing-premium and variable life promises that have not come true. NLPG sales rhetoric may be ignoring important implications. Informed advisors need to understand that NLPGs have very limited uses and when they are an appropriate option to clearly advise clients that they have one potential advantage, two potential disadvantages and one potential disaster. NLPGs selling is especially targeted at replacing existing life insurance policies. See my July 2003 AAII column on NLPGs and a redacted report to a client being hustled into replacing his Northwestern Mutual Life participating whole life policies with an NLPG policy. My position isn't that NLPG policies should be avoided, but that you and your clients have full information about potential advantages and disadvantages.