Articles Tagged with universal life

shutterstock_181783781-200x300According to newsources, tens of thousands of universal life policyholders have experienced double-digit premium increases from their life insurance companies such as AXA, Voya, and Transamerica.  Unfortunately, more premium hikes may be coming.  Universal Life is a permanent life insurance policy that combines term insurance like affordability with a savings element similar to whole life.  Universal life insurance offers a cash value savings account that earns tax-exempt interest. The investment account accumulates cash based upon interest rates or a promised fixed rate appreciation plus premium payments.

Similarly, Variable Universal Life (VUL) policies allocates a portion of premium payments to a separate sub-account that can be used to grow in value through investments.  These types of policies terminate or lapses, if at any time the net cash surrender value is insufficient to pay the monthly cost deductions.  Upon termination of the policy, the remaining cash value becomes worthless.

Investor and policy holders are often given projections of premium payments over time that are stable allowing the holder to know what the cost and terms of the policies are.  Now thousands of universal life policyholders have been informed that their insurers are using the fine print of their contracts to significantly increase what was supposed to be level premiums.  These increases may be multiple times more than what the insured had bargained for.

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