Universal Life Insurance Premiums Increase by Double Digits

The universal life insurance premiums of tens of thousands of consumers across the United States have jumped by double-digit percentages in the last two years alone. Similar hikes on other universal life insurance premiums are expected in the near future, especially for long-time policyholders.

If your universal life insurance premiums have increased drastically in recent years, especially without adequate warning, you may be able to file a lawsuit.

So far, several insurance companies are being investigated over their recent increases to the cost of universal life insurance premiums.

What is Universal Life Insurance?

At its core, universal life insurance is a permanent insurance policy that is reasonably affordable and also offers a savings element. In this way, it balances between term insurance, a more affordable insurance, and whole life insurance, which focuses on the savings element. This kind of insurance policy is permanent if premiums are paid on time.

Under universal life insurance, policyholders are offered a “cash value” savings account that earns tax-exempt interest. When interest rates are higher, a universal life insurance policy’s investment account will accumulate cash. However, when interest rates are low, accounts can be drained. Insurance rates have been low for several years.

Although the rate of universal life contracts was around 4 percent in the 1980s and ‘90s, universal life insurance premiums have in some cases increased by over 200 percent in recent years. Policyholders have discovered that their insurers, seemingly out of the blue, have used fine print to increase monthly universal life insurance premiums.

For some, this has led to drastic cost increases. This is especially true of those who are longtime policyholders: people in their 60s, 70s, and 80s who may be asked to pay up to thousands of dollars extra each month for policies they’ve held for decades. And if they can’t, or don’t want to pay, these extreme increases? Their policies may lapse, or they may need to take the cash value that is left. Regardless, losing a policy would mean there is no death-benefit payout that they have been counting on.

Rising Universal Life Insurance Premiums

Over the last several years, a number of life insurance companies have steadily announced that they would increase the cost of their universal life insurance premiums in response to years of low-interest rates.

The Consumer Federation of America (CFA) has contacted state insurance commissioners, urging them to make sure that the increases to universal life insurance premiums were done fairly rather than to protect the companies’ profitability.

Insurance companies that offer universal life insurance 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 Lawsuit Over Universal Life Insurance Premiums

Some policyholders have filed class action lawsuits against their insurance companies, alleging that the insurers are hiking universal life insurance premiums in order to give larger payouts to shareholders.

If you purchased a universal life insurance policy and have recently seen your universal life insurance premiums go up or your policy’s cash value drop, you may be able to file a lawsuit for insurance overcharge. A knowledgeable life insurance attorney can give you a good idea of your legal position and options.

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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