Insurance companies such as Accordia Life alerted policyholders that they would see an increase in universal life insurance costs in 2017. Some consumers are up in arms over the rate increases.
Most policyholders bought their insurance many years ago. Now that the policyholders are decades older, their chance of finding affordable alternative coverage is slim.
Accordia Life was previously known as Aviva USA until Global Atlantic Financial Group Limited acquired the company in 2013.
Accordia Life now is a subsidiary of Global Atlantic, which is an insurance company founded by Goldman Sachs in 2004. Global Atlantic has more than $30 billion in assets in 10 offices. According to its website, the company’s “success is driven by experienced leadership, a long-term focus on policyholders, financial discipline a culture that emphasizes teamwork, innovation and excellence.”
Accordia Life is now accused of unfairly increasing universal life premiums, in an effort to satisfy shareholders.
Universal life insurance policies differ from term life insurance policies. Universal life insurance can last for a policyholder’s life, and it comes with a guaranteed interest rate. Some policyholders saw their universal life insurance policy as a way to build a nest egg they could cash out upon retirement. In contrast, term policies have fixed costs and fixed benefits.
The cost of universal life insurance was more appealing in the 1980s and 1990s when interest rates were higher. Now that interest rates have plummeted and remained relatively low for the past several years, insurance companies fear they are losing money on such policies.
The Consumer Federation of America is asking the National Association of Insurance Commissioners to look into the rate increases. They question whether the rate hikes, which range from 38 to more than 100 percent, are justified or if the insurance companies are simply trying to appease shareholders at the expense of policyholders.
Accordia Life Among Those Accused of Unfair Rate Increases
Several insurance companies are facing universal life insurance lawsuits due to the unprecedented increase in universal life policies.
The policyholders allege the price hikes amount to a breach of obligations held under the policies. The insurance companies say they simply need to prepare for future forecasted costs to provide needed coverage.
Policyholders who do not wish to pay the higher premium can opt for a different policy, allow the policy to lapse, or reduce the death benefit. If policyholders allow their policies to lapse, insurance companies such as Accordia Life will most likely benefit because they will have collected premiums for years, but will not need to pay out on the lapsed policies.
While policyholders have seen their monthly payments rise in smaller increments previously, these new increases are not as easily absorbed in any budget.
If you have seen your universal life insurance policy cost increase with Accordia Life or another insurance company, you may be eligible to join an insurance overcharge class action 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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3 thoughts onDid Accordia Life Unfairly Raise the Cost of Universal Life Premiums?
My husband took out a flexible Premium adjustable Life policy over 32 years ago and I took out the same policy two years later. Premiums on my husbands of $19.83 and mine at $20.00 per month taken from our Bank account. My husbands base cost of Insurance is $74.02 per month, with a net surrender value of $253.14. My Base cost of insurance $22.49 per month, with a net surrender value of $9,826.22. I’m very confused as why this happened, I need to talk with someone to explain why this happened.
When entering into this policy, I was told that my life insurance premium for $150,000 was $137.46 per month, and that additional amounts would be treated as a type of savings account that would increase based on interest rates, and that the rate would only increase and never decrease.
My payments were set up as automatic deductions from my bank account. After October 2017, Accordia stopped taking my regular payments. I called them and they took $400.00 on 12/29/17.
They again failed to take payments in January, February, and March 2018. I made several calls to them, with them stating that they would request investigations.
Beginning 10/4/18 they began taking the correct monthly amount from my bank account.
The actual payment dates and amounts are not the same as the dates shown on the Accordia statements. Their statement is a fabrication of dates created after the fact.
They sent three threatening letters during this time. If I am reading the letters correctly, they used what little cash value I had in my policy to make payments on my premiums.
I should have been receiving interest on the savings in my account. Because they failed to take my payments, I received nothing. The policy has been sold twice and the purchasing companies are charging higher fees than I agreed to.
I chose not to send payments by check, because I didn’t trust that wouldn’t also deduct the payments and overdraw my account.
They cannot, or will not, reveal to me what my actual Life Insurance premium is.
This policy, or at least this company, has turned out to be a total farce and I feel mislead and cheated.
Accordia has increased the payment on my Universal Life Policy from $9150/year to $37,564/year – I’ve had the policy for 15 years and will be 90 years old next February. They tell me this is because the cost of Life Insurance increases with my age and the cash value of my policy went to zero. It’s ridiculous for me to make payments of this amount so I probably will let the policy lapse.