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Universal life insurance policyholders are, in ever-growing numbers, being hit with extreme premium increases. If you have been hit with a universal life insurance cost hike, you may be able to file an insurance overcharge lawsuit.
Several life insurance companies that sell these policies are being investigated over their rising universal life insurance cost.
Universal Life Insurance Cost Increases
A number of life insurance companies announced last year that they would be increasing their universal life insurance cost because of multiple years of low-interest insurance rates. The Consumer Federation of America responded quickly, contacting state insurance commissioners and urging them to make sure that these universal life insurance cost increases were done for legitimate reasons, rather than just to protect the insurance companies’ profitability.
Some policyholders have filed insurance class action lawsuits against their insurance companies, alleging that the insurers are hiking universal life insurance cost in order to give larger payouts to shareholders.
Policyholders who have been affected by universal life insurance policy premium increases have a few options moving forward. Some choose to simply pay the increased premium. Others try to find a different policy, but it can be difficult to find an affordable alternative. Some reduce the death benefit of their policy. Some even allow their policy to lapse, but this approach often benefits the insurance company.
Policy Cash Value
The premiums you pay toward your universal life insurance policy go into what is known as the policy’s cash value. Part of these premiums goes toward paying the insurance company’s guaranteed interest rates. The universal life insurance cost is then deducted from this cash value amount.
This means that when the universal life insurance cost exceeds the premiums you’ve paid on the policy, insurance companies then deduct the balance from the cash value of the policy. If this makes the cash value decrease to zero, then the policyholder generally either has to pay higher premiums or even lose their policy entirely.
Insurance companies that offer universal life insurance policies currently under investigation include:
- Accordia
- Aegon USA
- Allianz
- Allstate
- AXA
- Alexander Hamilton Life (now Lincoln National Life)
- Conseco Life Insurance Company
- Equitable Life Insurance Company
- Great Southern Life (formerly Ohio Life)
- Minnesota Life/Securian
- MetLife
- Monumental Life (now Transamerica)
- NACOLAH Life
- National Life Group
- Nationwide
- Old Mutual Financial
- Pacific Life
- Penn Mutual
- State Farm
- Southland Life Insurance (now VOYA Financial)
- Transamerica
- USAA
- VOYA Financial (formerly ING)
Filing a Universal Life Insurance Cost Lawsuit
A growing number of policyholders are becoming concerned with these sudden increases to universal life insurance cost, some fearing that companies that make these kinds of moves cannot be trusted to adequately protect and insure them going forward.
If you purchased a universal life insurance policy and have recently seen your universal life insurance cost go up in premiums, you may be able to file a lawsuit for insurance overcharge. You may also be able to file an insurance overcharge lawsuit if the cash value of your policy has diminished greatly.
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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11 thoughts onPolicyholders Face Substantial Universal Life Insurance Cost Increases
My cost of insurance rates are already a few hundred thousand dollars higher than illustration
My Wilcac insurance also went up over 300%. I get a regular mailing from them saying I am in a grace period along with paying the regular premium. I am concerned that the money is to pay shareholders and not a genuine increase in the cost of insurance.
Wilco, Wilcac, universal life insurance contract, cost of insurance in policy states maximum COI is $160 this company based in Indiana, has increased our cost of insurance to nearly $400 over the last five years representing a 300 percent increase with a notice of increase yet again to over $420 per month. This company sends out notices of insurance lapse grace period even when that is not the case at all. These policy holders are elderly citizens who have paid all their lives on these policies. Is there a man who would stand up for us?
I got a ULI policy in the 1980’s through my company (Group ULI), it started out as a John Hancock policy; the company (DEC) was taken over by Compaq (I was laid off in 1993 by DEC, but continued the policy). I was rehired approx. 1997 by Compaq (STILL kept the same policy), eventually in approx. 2008, the policy was “given to” CIGNA, and although I still had a copy of the original policy, they sent me another copy with rate sheet. It was still affordable at the time. The last few years, the rates have been “jacked up” considerably(?!) NO EXPLANATION from CIGNA. I called them beginning of 2019, and had to cut the coverage from 35K to 22K. Now this year (I turned 67), I received the new 2020 quarterly bill, and it went up $80/yr. I am very aggravated as I am now on a fixed income (no pension, no savings, NOTHING). My health ins., property taxes and now this have all gone up. These insurance companies suck up your money for years and then jack up the rates so you are forced to drop the policy (I guess I will become one of the “homeless” people I see on the news sleeping out in the cold under a park bench. ) THANKS ALOT for your GREED.
State Farm sold us a ULI about 25 years ago ….I got an invoice each month that said “pay this amount” $400 ….which we did. One agent said price had gone up due to getting older …we did pay more. Just got canceled due to not sending them enough. We begged them for a bill that told us accurately EXACTLY what we needed to pay each month – NEVER got updated amount bill. Just received letter back dated giving us 10 days to re-apply and send additional $1,800 with no certainty that they will re-continue the policy. I told our “agent” that I had prostate cancer, (now gone) a melanoma (gone) and recently diagnosed with Parkinson’s ….did they target me for cancellation? Does my agent get bonuses for paying out the LEAST amount of claim money? Agent supposedly did a change of some kind on the policy just before (I suspect) the class action lawsuit against ULI policies as we were never included in that suit and I repeatedly asked “Why weren’t we included – Why weren’t we notified?”. Always answered she knew nothing about what I was talking about.
The link to apply for the class action lawsuit is not working. Please let us know how to get in on the class.
We purchased a Universal Life policy for my husband from State Farm 35 years ago and were told the premium would never go up and it wouldn’t be cancelled when he got older. Today we received a letter saying we had to pay over $700 before the end of the month or the policy would lapse. Even at that this money only covers the insurance until this coming January. What then? My husband is 76 years old and a different policy is out of our financial means.
who ever wrote this article is missing some brain cells. some of these insurance companies are mutual. so they do not have stock holders. get your facts straight before writing an article.
I Just had the same thing happen to me. I bought a 74,000 policy with State Farm for $25 a month and was told it would never go up. It went to $30, then $35, then $40 with me hearing excuses. I am done with the excuses, I want to settle this in court.
Talking to my agent a couple weeks ago he said he too didn’t think it would go up. I said he should have said there is a possibility it could go up and not make the statement “Never”.
We bought our policy from Nationwide Life Insurence in 1968 for $25,000.00 on each of us our police went from 29.75 to 647.00 of course we had to let it lapse. Our agent never once let us know.
My husband took out a uli policy 30+ years ago from Southern Farm Bureau. He recently received a letter that it would lapse in a couple of years. Checking with our agent he was told to increase his premium 300% to be able to keep it a few extra years. How can they do this? My husband is 65 years old and not in the best of health. What can we do?