Lincoln Financial Insurance Policy Owners Face Dramatic Premium Increase

Late last year, some owners of a Lincoln Financial insurance policy found themselves in a situation where their insurance premiums dramatically increased for no apparent reason.

In October 2016, some policyholders of a Lincoln Financial insurance policy were notified that there would be an increase in monthly deductions for the cost of mortality on policies that were purchased several years ago.

The policies that fall under this increase were issued by Jefferson Pilot Life from 1999 to 2007 and includes those who have purchased secondary guarantees.

The COI (cost of insurance) rate, the policyholders were notified, would increase by 100%.

This increase affects some 25,000 Lincoln Financial insurance policy policyholders.

In essence, for these Lincoln Financial policy holders to maintain coverage under their universal life insurance policies issued by Lincoln Financial, they will have to pay far more per month to keep the same amount of coverage.

If a policyholder has purchased a secondary guarantee, their policies will decrease in value.

The major problem with this situation, beside the fact that the increase seems unfair and extreme, is that it primarily affects those who are 70-years-old or older.

Those in this age category have a hard time replacing their policies due to their age, medical conditions and the cost of appropriate policies.

Other insurance companies beside Lincoln Financial have done the same: Transamerica, Voya and Banner. Many policyholders with these companies have become very unhappy or lapsed on their payments.

Lincoln Financial says that the reason behind the increase is the current low interest rate that is making the portfolios of the insured problematic.

Critics claim that the real reason behind the increase is that the high number of lapsed policies will positively affect the bottom line of insurers like Lincoln Financial.

Unfortunately, if these rate increases make it impossible for some policyholders to keep their Lincoln Financial insurance policy, those people could lose everything they have saved since 1999.

Many believe that this COI rate hike benefits only the insurance companies as they are attempting to become profitable again and are not in the best interest of the insured.

It is also believed that this recent practice may backfire in the industry with the large amount of unhappy policyholders.

What is Universal Life Insurance?

There are generally two types of insurance policies: universal and term life insurance. Term life insurance policies are the basic life insurance policies that many people have.

Term policies provide protection for accidental death and debilitating injuries over a period of time.

The policyholder pays premiums to an insurance company, and in the case of death, the company pays the benefits. The rates for these policies are fixed and are lower than universal life policies.

Universal life insurance policies are generally considered investments. The cost of insurance is deducted and the cash value goes to the policyholder. These policies are sold at a guaranteed interest rate and the COI rates are dependent upon these interest rates.

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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