Transamerica Life Insurance, Other Companies Raise Premiums on Universal Life Insurance

A growing number of life insurance companies, including Transamerica Life Insurance, are dramatically raising their premiums out of nowhere. In some cases, premiums have increased by percentages in the double digits—a change that can severely affect consumers with these policies.

Consumer advocate groups have taken notice of these premium increases, and many of these life insurance companies, including Transamerica Life Insurance, are under investigation for their recent changes in policy premiums and other practices.

Some consumers are even taking this problem to court. A California advocacy group, Consumer Watchdog, joined several insurance litigation specialists in filing a lawsuit against Transamerica Life Insurance Company this past February. The claim was filed on behalf of the company’s policyholders, who were told last year out of the blue that they would be facing premium increases of around 38 percent.

According to the plaintiffs, Transamerica Life Insurance Company has breached its own policy terms by so dramatically increasing its premiums. The Transamerica lawsuit claims that this is just a method that Transamerica Life Insurance has come up with to gain money by avoiding the low interest rates agreed upon when they sold these policies to consumers.

The plaintiffs ask that Transamerica Life Insurance reverse these increases, as well as pay damages to policyholders. For consumers who gave up their policies due to the increases in the last few months, Transamerica Life Insurance should reinstate their policy, the plaintiffs claim.

According to these plaintiffs, Transamerica Life Insurance is attempting to “impermissibly shift to the policyholders its own, independent obligation to make good on the interest rate guarantees in the policies.”

Transamerica Life Insurance holds that these premium increases are fair. A company spokesperson, Gregory Tucker, wrote that Transamerica’s policyholders are not actually being charged in excess of the maximum rates listed in their policies, so the company is “in full compliance with its contractual obligations and intends to contest vigorously the recently filed litigation.”

The premium increases sweeping the nation have earned the notice of the Consumer Federation of America, which asked the National Association of Insurance Commissioners to investigate the justification behind these increases.

The Effects of Universal Life Insurance Policy Increases

Policyholders whose premiums have recently increased, especially those whose affected by increases in the double digits, can be severely impacted.

Those who purchased their universal life insurance policies decades ago may be unable to afford new policies now, or may be unable to find or switch to an alternative policy. Even when consumers are able to find new policies, the process can be difficult.

Transamerica Life Insurance is not the only company to have increased their premiums in the last several months. Some companies have actually initiated even sharper increases. For instance, Lincoln Financial Insurance Company upped their premiums by 100 percent, affecting around 25,000 policyholders. Across the country, hundreds of thousands have been affected by these changes.

Some policyholders who face premium increases choose to simply pay the increased premium. Others try to find a different policy, but it can be difficult to find an affordable alternative later in life. Indeed, most of the policyholders affected by these premium increases are elderly. At this age, many people are unable to replace their policy coverage because of age, medical conditions, and the heightened cost of replacement policies.

Universal Life Insurance Lawsuit

If you purchased a universal life insurance policy from Transamerica Life Insurance or another such provider, you may be able to file an insurance overcharge lawsuit.

Join a Free Universal Life Insurance Class Action Lawsuit Investigation

If you purchased a universal life insurance policy through Lincoln Financial Insurance or another insurance company, you may qualify to join a FREE class action lawsuit investigation and pursue compensation.

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