Many people consider buying into permanent insurance policies. Almost always, I see an illustration when people bring it to me with a hypothetical illustration. On some policies these projected illustrations carry a hypothetical rate of return of 10% to project where cash value accounts will be over the next 20 to 25 years.
The key to remember on all of these policies is that a hypothetical illustration is exactly as it sounds, hypothetical. Once your insurance policy is in force, the illustration is only as good as the actual performance. You should ask your insurance agent every year to run you an in-force ledger statement so you can see exactly what your policy is doing. If actual performance is below what you were originally projected, you may need to add more money to the policy in order to keep on track with your stated objectives.
With the returns in the market over the past 5 years, pay close attention to your policies so they don’t fall behind your goals.
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