A new book from financial advisor and author, Elan Moas, (pictured at left) exposes what he calls “groundbreaking, widespread design flaws and revelations” in his latest book that could “shake the foundations of the life insurance industry.”
The book, LAPSED: The Universal Life Insurance Whistleblower, presents the findings of Moas’ extensive research into over 5,000 individual universal life (UL) and variable universal life (VUL) policies, totaling over $1 billion in death benefits. His work reveals why he claims 90% of these policies are at risk of lapsing before ever paying a death benefit.
In the wake of his research, Moas said via a press release that he has alerted regulatory bodies, earning the attention of the state of Massachusetts, who referred the matter to the Attorney General’s office. Furthermore, he filed two whistleblower complaints with the Philadelphia SEC office, based on his comprehensive study of UL/Group UL and VUL/Group VUL policies.
Key revelations from “LAPSED” include:
- Widespread Problem: The lapsing (or crashing) of UL and VUL policies is not limited to a single company. The inherent policy design flaws are prevalent across various companies in the life insurance industry.
- IUL Actuarial Guideline 49B: The May 2023 update has exposed flawed investment illustration assumptions in sales made prior to this date, potentially damaging to all IUL policyholders.
- “Target” Funding Deception: Policyholders are falling victim to advisors and insurers prioritizing their commission gains over the well-being of the insured, leaving them with inadequately funded policies destined to lapse.
- Fatal Flaws in Group UL/VUL Policies: Even Fortune 500 companies’ employees are at risk due to structural policy flaws that can leave them with nothing.
- Elder Abuse: The elderly’s life insurance policies are being eroded, causing their cash values to vanish even before lapsing—a disheartening reality that must be addressed.
In response to these revelations, Moas is urging all universal life policyholders (UL, VUL, IUL, or group UL/VUL) to learn to safeguard their interests. Investors in the life insurance sector, whether in bonds or equities, must also seize the opportunity to understand the significant risks they face. A compelling argument is presented in the book, demanding a law mandating annual “in-force illustrations” for every universal life insurance policyholder.
Moas says his research, backed by 15 years of experience in direct life insurance sales, has unveiled the uncomfortable truth about the industry. He says the implications of his work point to the potential “Subprime Universal Life Insurance Company Crash of 2023,” a crisis that must be averted to protect millions of insured individuals from unforeseen lapses.
“This compelling revelation is a wake-up call to Wall Street and lawmakers, demanding they acknowledge and rectify this pressing problem,” the press release concludes.
This may sell 10s of copies.
He's getting his time in the sun and getting industry press for having published his book that challenges what people have already bought. He has now written a book, so that makes him an authority, even though it's likely self-published. I'm sure he uses it to help convince current policyholders to switch to a new contract. That's what the comments look like.
Don't get me wrong – I think the things he's bringing up are important. However, I'd rather have that as an appendix of a book, or a blog article (which I have written about), not the title of a book.
Not with that picture on the cover.
Mass Mutual rep. While i agree with much of the points about UL, it isnt like WL has been immune to falling short of some projected future values & earliest premium vanish, etc
Falling short of expectations and lapsing are two entirely different subjects.
While your policy may not offset or distribute as much income as illustrated, if you pay the premium the policy will not lapse.
While this may be semantics (probably is) an illustration is not a projection.
There is a thought process with a projection.
There is no thought process with an illustration, it is what you are currently paying carried out into the future.
Now could you say this projection is based on the same dividend scale, same mortality cost and the same admin costs?
Yes you can, please include there is 100% chance of that not happening
I am always a bit leary of someone who writes a book.
What is the goal?
I hope not royalties.
You see these websites or authors who claims “I do it right” and offers a review.
That’s like you can’t find your own clients, so you are coming after mine.
So what makes his book different than any information previously published by Dick Weber or Robbie Samuelson?
unless the UL/IUL/VUL has a no lapse protection guarantee, I am not sure I am understanding? Seen a lot of fixed UL policies over the years where consumers paid "the premium" & still lapsed when interest rates went from 12 to 4 or 8 to 4. This too can be the case with IUL/VUL unless "the premium" is designed to be overfunded, etc. The issue is that "the premium" is never really defined as how much is needed to guarantee coverage to not lapse unless it has a no lapse guarantee
If you pay your whole life premiums your policy will not lapse.
the premium" is never really defined as how much is needed to guarantee coverage to not lapse unless it has a no lapse guarantee
This is correct but even in a no lapse ul, does the policy state the premium in dollars or say the no-lapse premium.
Then what if you pay late does it change the guarantee?
A whole life policy has a stated guaranteed premium.
A policy bought 10 years ago probably does not look that different than the illustration.
15-20 years ago those policies will look a lot different.
I first came to Guardian in 1996, I saw some illustrations at the highest dividend rate of 13.25…………..Sign me up
I heard about the book, and I bought it. Haven't gotten it yet so can't speak to details. However, there has been a great deal of bad press about UL. It's a potentially problematic product, but not for the reasons most people think. People — even insurance professionals — react as if it's an indictment of UL, when in fact most often it's not. It is an indictment, most often, of the way it was designed (by the agent), the way it was sold, the way it was funded, and the way it was serviced and managed (actually, the way it wasn't, LOL).
So, depending on what this guy wrote, said, portrayed, whether he has accurate data, and so on and so on…this could be an interesting read.
Apples and bowling balls. Clearly you see the difference.
most often, of the way it was designed (by the agent), the way it was sold, the way it was funded, and the way it was serviced and managed (actually, the way it wasn't, LOL).
BINGO!
Let's not forget that illustration standards weren't codified until 1997. I blame the companies until that point.View attachment 10182 View attachment 10183
I replace 5-7 UL policies every single week due to a lack of funding. Agents have got to start selling UL policies properly and fully explaining – in layman’s terms – how they work to their customers.
Why just have policyowners increase the funding?
Simple solutions… Sell Non Par. Will always meet projections. 🙂
not with how some agents position WL & how much will be distributed to the client in supplemental retirement checks, etc. Just look at how a client that bought a Ohio National Policy 5 years ago will look long term. Sure, it wont lapse if base premium paid, but many were projected to not pay premiums after a period of time & take out enormous amounts of cash. I agree with many points in the book, I am just saying that WL is not immune from falling short of projections & no one is buying those WL plans for the guaranteed minimum face & paying premiums. If they were, they would likely be buying a no lapse UL/IUL or a non participating WL that buys more face .
most policies cant overcome the years of too little premium & withdrawals/loans. Those policies are subject to the pre-2022 new premium guidelines, meaning most dont have enough room to fit the amount of premium needed to save the policies. This is partly because of the escalating ART cost of insurance, sometimes face reductions completed or needed (which restarts the 7 pay test), etc. Basically, past the point of being able to make them last long term & they have become ART term insurance that will only last X # of years. (very costly term insurance at that)
Shockingly, the primary carrier I work for allows UL clients to convert their UL policy to either a paid up participating WL or a premium paying WL policy without proving insurability. It was designed as an option for those clients that couldnt save their UL contracts & in many cases were no longer insurability. There are also tons of very good performing ULs on the books, especially those sold by the agent & serviced for excess funding. There are tons that have so much cash in them, that there is literally nothing more than a tiny corridor of insurance & almost 0 annual COI because they are filled to the brim with cash
Apples — WL not performing as illustrated vis a vis premium offset, projected cash value, etc.
Bowling Balls — UL policies imploding.
Period.
You're kidding, right?
WL is built upon a series of guarantees, including a guaranteed, increasing cash value.
UL — even in a no lapse guarantee UL — is not. Period.
WL shifts risk to the insurance company.
UL shifts risk to the insured.
WL has a guaranteed death benefit.
No lapse guarantee UL, has a guarantee for the death benefit, however, it is a conditional guarantee.
For guaranteed death benefit, you have far more "conditions" to meet with a no lapse guarantee UL than you do with a WL policy.
Who are the companies that will let you convert your UL to a different policy without an exam?
He never said no medical.
I do find it a bit hard to believe that every ul he comes across is underfunded and the client would be better served with a replacement rather then just increasing the funding.
David McKnight dropped this video today:
good stuff.
I cant believe how many people, including some big time WL producers say " the insurance carrier keeps all the positive returns of the stock market over & above the cap"….Duh, none of the money is even in the stock market & part of the reason agents dont need securities licenses. So, if none of the money is even in the market, how can the carrier keep the upside returns over & above the cap? If it was actually invested in the market, like many believe, they couldnt achieve the guarantee of 0% floor as that comes almost entirely from the 90%+ of the money being invested in the carrier general account of Bonds/Mortgages, etc
One of my 'group experts' in the Facebook group does a lot of COLI cases and has actually done political advocacy work to preserve those benefits. He probably knows more than I've ever learned. I didn't ask his permission to post his response, so I just blocked his name.
Here was his response regarding this guy's book:
View attachment 10266
It’s not hard to predict who would be stirred by a book like this. Everyone you agree with is not right 100% of the time, and everyone you disagree with is not wrong 100% of the time. Truth exists but must be sought. THAT is the work most won’t do. It’s hard to understand something when one’s paycheck depends on one not understanding it.