When I came into the brokerage side of the insurance industry in 1995, my introduction wasn’t glamorous — it was triage.

I spent my first couple of years not selling policies, but rescuing them — specifically Universal Life contracts that were oversold and underfunded during the high-interest-rate frenzy of the 1980s. People were told they could pay minimal premiums, earn double-digit returns forever, and still have guaranteed death benefits and tax-free income in retirement.  

Then reality hit.  Rates dropped, projections failed, cash values evaporated, and thousands of policyholders were receiving massive premium notices on policies they thought were “paid up.”   Those early years changed everything I believe about life insurance, guarantees, and the damage caused when illustrations replace math — or worse — replace truth.

Fast-Forward to Today…..Same Story, Similar Consequences.

There’s a familiar — and dangerous — trend resurfacing in the advisory community:   Consumers being sold IULs and VULs with LTC or chronic illness riders and calling it a Long-Term Care Plan.  On the surface, it sounds smart with one policy providing multiple solutions, but in reality, it's misleading, overpromised, and non-guaranteed, because here's what they aren’t being told:

• Most IULs and VULs do not have lifetime (secondary) guarantees.

• They’re built on projections, not promises.

• And when they’re positioned as the LTC plan, clients are unknowingly relying on non-guaranteed assets to fund guaranteed needs.

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Let’s Be Clear About The Core Problem

Before UL ever existed, life insurance was simple: Pay a guaranteed premium, receive a guaranteed death benefit, and the cash value equaled the death benefit at age 100.  And then came Universal Life in 1979 — marketed as “better, flexible, more modern.”

And then interest rates collapsed.....Now, forty years later, we’re repeating the same mistakes — only now with more moving parts, more hidden charges, more fine print, and now… we’re pretending it solves long-term care.  However, this fails as a LTC strategy because LTC requires certainty, and these policies don’t offer it.  They offer:

• No guaranteed death benefit for life (without costly riders)

• No guaranteed premium schedule

• Cash value tied to hypothetical policy performance

• Rising internal costs as clients age

• Complex loan mechanics that the average advisor never explains or stress-tests.

In LTC planning — where timing is uncertain but costs are guaranteed — using IUL or VUL without secondary guarantees isn’t innovative. It’s reckless.  And on top of the lack of guarantees, these policies often include:

• Asset-based management fees

• Administrative charges

• Insurance costs that increase with age

• Surrender charges

• Loan interest if clients try to access their own cash

And what happens when the policy underperforms or expenses increase?  The carrier sends a bill, or worse, the policy lapses.  Either way, your so-called “LTC Planning” becomes woulda-coulda-shoulda!

The Long-Term Care Planning Bottom Line

As a general rule, selling an IUL or VUL - without lifetime guarantees - and slapping on a LTC or Chronic Illness rider isn't Long-Term Care Planning or being creative — It’s negligence in business suit.   Clients don’t need hypotheticals when they’re in a memory care facility or writing checks for home care.  They need guarantees, predictable funding/cost certainty, tax-efficient leverage, and benefits that are actually there when health declines

When the care need arrives, illustrations don’t pay bills — guarantees do.

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