Life Insurance Performance Considerations
Economic conditions, such as low interest rate environment and equity market volatility generally impact all financial instruments, including life insurance. Typically, Insurers invest in high-quality bonds and mortgages, and these portfolio yields have continued to drop. This results in continued downward pressure on Universal Life performance and crediting rates which are tied to portfolio yields.
Life Insurance illustrations and performance are not guaranteed and will change over time, and as a result, Trustee ations may be required to maintain the insurance goal. Also, different product types have different risks and guarantees which impact product performance. Fluctuations in pricing fundamentals, like mortality experience,investment yield, expense experience and persistence experience can also affect performance.
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