Life Insurance: "Cost of Insurance" Rate Increases and Overcharges

Life Insurance: "Cost of Insurance" Rate Increases and Overcharges

We are currently investigating and prosecuting claims against life insurance companies for improper "Cost of Insurance" (COI) rate increases and overcharges in connection with life insurance policies which contain an investment, interest bearing, or savings component in addition to a death benefit. These types of policies are generally referred to as Universal Life Insurance, Variable Universal Life Insurance, and Variable Whole Life Insurance.

These policies typically restrict insurance companies from increasing cost of insurance rates unless the mortality expectations of the company have worsened.  For most companies, the mortality expectations have improved over the last several decades and thus your rates should be lowered rather than increased. In addition, these companies maybe inflating your current COI rates with hidden expense loads in violation of the policy provisions. Our firm is prosecuting several lawsuits on behalf of policyholders alleging that insurance companies do not follow the terms of their policies when increasing cost of insurance and when inflating cost of insurance rates with undisclosed and unauthorized expenses.

How do I know if I have one of these policies?  These policies typically have a separately identified charge called a “Cost of Insurance” charge or “Mortality” charge.  These charges are typically identified in the annual policyholder report submitted at the end of the year.  In addition, you might find a description of these charges in the Policy itself.  If your policy contains such a charge, your insurer may be overcharging you.

In addition, if you received a letter announcing that your “Cost of Insurance” rate or “Mortality” rate will be increasing, these increases may violate the terms of your policy.

These improper rate increases and overcharges for Cost of Insurance can be several thousand dollars, depending on the amount of insurance you own and the length of time you have held the policies. We would like to hear from you if you have these types of policies.

Please call Sherry Barry at (888) 816-2108 or, so that we may schedule a free consultation.

Read more from an insurance industry expert about the issue of these alleged cost of insurance overcharges.

Read more in Super Lawyers Magazine

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