Universal Life is not an investment campaign has started…


This campaign has started with the launch of the book: “Unraveling the Universal Life scam” which can be ordered at:

If you are a consumer and you have been advised to buy this product, you need this book. If you are an advisor and you are promoting this product, you need to read this book.


Hard copy: https://www.createspace.com/5108100

kobo: http://store.kobobooks.com/en-CA/ebook/unraveling-the-universal-life-scam

Buying a Universal Life insurance policy as an investment is a sales pitch that can sound compelling. To make this sales strategy harder to resist, insurers employ the use of illustrations which are supplied to agents and brokers as sales tools. These illustrations have become an exercise in deception, showing cash values that have nothing to do with reality. For the first time, this scam is exposed for what it is. If you have bought or are considering buying a Universal Life insurance policy, you need to read this book.

Please note that part of the profit from the sale of this book goes towards supporting consumer rights through the Financial Services Consumer Alliance.


  1. Dan Anders CFP, TEP
    Principal, Interact Financial Design Services Ltd.

    I agree and don’t agree Richard.

    First of all, I maintain that there MUST be a need for insurance before it can be introduced as a solution. In that respect, many many many policies have been sold incorrectly. One can blame head office marketing people for most of that, but professional insurance field-underwriters also need to remember to use their brain to correctly evaluate any policy’s features and benefits BEFORE deciding to recommend it to consumers.

    So assume there is a legitimate need for our product, life insurance. If there is, UL offers multiple deposit possibilities that can the effect of negating the bare cost of the purchase of insurance protection. Thus, from that standpoint, and because assets otherwise being invested in taxable accounts can be redirected to a UL policy to help limit the costs, doesn’t that qualify as an investment vehicle? I say in light of the fact that I recommend Whole Life insurance, or term insurance where they each fit well, too.

    Investments are tools that can enrich an individual’s or company’s balance sheet when done properly. Both growth as well as expense-reduction are valid contributors to a healthy balance sheet, to say nothing of legacy value which insurance contributes nicely toward.

    I would say, as I always have, that when used responsibly and all factors are known by all parties to the policy, that it is hard to say that it can’t be an investment. I will however read your tome and then offer more commentary. Thank you.

  2. Richard Proteau
    Founder Financial Services Consumer Alliance

    Dan, Life insurance should be viewed and manage as an asset but it will never be a viable investment.Even the actuaries who have designed the Universal Life have stated this and I have their communications in writing discussing how to design software to produce illustrations to inflate cash values in order to promote the UL as an investment. I have sold a lot of UL in my career, always as an asset but never as an investment. My last UL case was more than 300 million of death benefit. I did not sold the UL as an investment. I sold it as an asset and the only question I ask the client was whether he wanted to buy this asset over 10 years, 20 years, 40 years or life. He chose 20 years at the 3% minimum guaranteed rate because he understood that the index funds of UL are just a scam.In 25 years of career, I had many agents sending me UL annual report on UL sold by advisors who had disappeared after the sale demanding my opinion as what to do with these policies. I never saw on UL sold as an investment that came close to what was illustrated when index funds were used.They all had to be cancelled…

  3. Gary Strange,CLU,ChFC
    Senior Financial Representative at Principal Financial Group, Investment Adviser Representative

    Gentlemen. It really all comes down to need and suitability doesn’t it? UL has many great uses in business and estate planning, especially since many companies have added features that guarantee the death benefit for much less than a whole life contract. It certainly is an asset class but certainly is not an investment. I’ve heard no mention here of VUL which in my experience does work extremely well as an investment when funded correctly. Not for everybody but in the right circumstances is a great tool.

  4. Richard Proteau
    Founder Financial Services Consumer Alliance

    Gary, i agree UL is good for business needs or estate planning. But to invest in a UL in order to extract a future cash flow, in this instance the UL will always perform poorly. It is a poor investment for that purpose. The only reason that the client is not seeing this is that the illustration he is seeing is an exercise in deception and the results shown have nothing to do with reality. the illustrated cash values have been inflated. This was done on purpose by the insurer in violation of the code of ethics of CHLIA. I have just finished a legal brief to a law firm which has reviewed my conclusions and they have reached the legal conclusion that indeed clients were deceived and there is valid grounds in recovering damages through a Class Action. For the last 10 years I have told the industry they should not illustrate Index funds using a constant rate of return. They should have listened to me and a few people that were at Maritime Life at the time…

  5. Gentlemen

    Always there will be a Richard who will come with these type of arguments for and against Life Insurance Policies There were insurance companies that withdrew from the Whole Life market and simply promoted UL and only UL Now the very same company is promoting Whole Life and their Wholesale persons who once shouted ” Hosanna’ of UL are now “throwing stones” As as advisor I make the decision based on my clients circumstances There are uses for UL and WL when the circumstances are right and appropriate I am surprised it took Richard this long to realize the truth

    • Mr Mathew, it is customary for a professional to read the book before commenting on it. If the price is too high for you, i will gladly offer you a discount. Still you could have at least read the comments where you would amazingly found that I do not condemn the Universal Life when it is used correctly such as in estate planning. I have been against the use of Universal Life as an investment for 15 years when I first publish my findings in Marketing Options under my column Building Blocks. Now that we are clear on this, this Richard would like you to explain to him how a Universal Life sold by Transmerica, Industrielle, AIG… using an illustration based on a constant rate of return of 8% (therefore when adding up the MER of 4%, gives you a 12% rate of return not showing on the illustration) with a conditional bonus of 8% which will be paid 100% of the times on the illustration will come remotely close to the actual cash values that the client will earn by investing in Index link funds which will provide volatile returns. Explain to us Mr Mathew why you consider this as not being a deception, because it seems there is always a Mathew who can’t seem to differentiate right from wrong.

  6. Tatjana Burcul
    AVP, Financial Solutions at MD Physician Services

    I agree that advisors need to understand what they are illustrating to clients, and certainly, when illustrating any index or managed account within UL, advisors need to use an illustrated rate that is net of MERs, and that either mimics the volatility of the account or the expected long term (likely 30+ years) return of the account. Understanding the implications of using these factors requires investment knowledge, which sadly, not all insurance advisors have or choose employ with the required rigour it demands. If that is the point that you are making in your book, then I am aligned.

    The concern that I have is that your marketing approach is sensationalistic and not everyone will read your book to understand your true message despite its economical price. I do see why you want visceral responses to your comments: because in the industry you will get less feedback and less awareness of the issue if you simply say that everyone needs to employ responsible, realistic assumptions that reflect the expected return of the investment, the client’s time horizon and purpose for the product.

    I do applaud your efforts to get the word out.

  7. Richard Proteau
    Founder Financial Services Consumer Alliance
    Top Contributor

    Tatjana, I understand what you are saying. However, this is a battle that has been going on for more than 10 years where we tried the non-sensational approach. Complaints were made in 2000 to the federal government and provincial government regarding illustrations for Universal Life. These complaints did not get heard because the voice of the insurance lobby is too great. To get heard, we have to try another avenue which will be sensational and legal. For example advisors and insurers promoted YRT UL with a minimizer as a great investment. However in 2000, when I was at Maritime Life, our study showed that the minimizer did not work with volatile returns because you can decrease the death benefit by as much as you want if returns decreases but you can only increase the death benefit by 8%. However you don’t see this on a illustration based on a constant rate of return, This is why we introduced the stabilizer on Maritime Life UL. to smooth the returns. Was the stabilizer adopted by other insurers. No!!! because these insurers knew that advisor did not want to explain such a complex option. it’s a lot easier not to mention anything and sell the minimizer option using deception… My book talks about every deception that has been used to promote the sale of UL as an investment….if my book is not a success, this is fine but at least the genie is definitively out of the bottle and no insurers or advisors can continue using these deceptive sale practice without facing serious legal consequences.

  8. Richard Proteau
    Founder Financial Services Consumer Alliance
    Top Contributor

    Just another word Tatjana. The sensationalist approach does work as I have employed it in Quebec with the orphan clients. For 20 years the industry talked about the orphan clients while maintaining the status quo. it was very much non sensational until I decided it was enough and then i asked the Superior Court of Quebec to render the law pertaining to the distribution of financial product and service unconstitutional based on the existence of the orphan policies. it was very sensational and 1 day before this was heard in court, the regulator published a press release confirming what i had said all along and that the existence of orphan policies constituted infractions to the law forcing insurers to deal with the issue of be facing severe financial penalties. that’s what i call results.

  9. Richard, as a consumer and one who has been professionally engaged in research on the subject since the early introduction of UL in Canada, I fully concur with your observations and notations.

    I join Tatjana in applauding your efforts to educate the consumer.

  10. “My last UL case was more than 300 million of death benefit.”

    Tech billionaire buys record-setting $201 million insurance policy
    Robert Frank | @robtfrank
    Friday, 14 Mar 2014 | 2:38 PM ETCNBC.com

    A mystery tech billionaire has just purchased the most valuable life insurance policy ever. It’s worth $201 million.

    The policy was sold by Santa Barbara, Calif.-based SG, a global advisory firm specializing in complex financial solutions for wealthy clients.

    According to Guinness World Records, the $201 million policy beats the previous record for a life insurance policy—a $100 million policy for an unnamed American entertainer.

    • The previous record of $100 millions seems low. Please note you have to account for multi life policies. In my case, the total was $300 million for one family with X amount on each member as part of an estate freeze.

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