Life insurance question form a novice. Please help:)

[Allen Trent]

True.

However, the back door attack on those is the companies raising the cost of insurance.

Last I knew there were class action lawsuits for that & many regulators had denied the applications to raise COI to offset lower interest rate environment. The justifications from regulators was that mortality experience had improved since product creation, not gotten worse. If anything, the policies warranted COI reductions not increases based on mortality priced V morality experienced.

Jury Trial Scheduled for Proposed Class Action Against Genworth Challenging Excessive Cost of Insurance Increase on Universal Life Insurance Policies

 

[scagnt83]

Last I knew there were class action lawsuits for that & many regulators had denied the applications to raise COI to offset lower interest rate environment. The justifications from regulators was that mortality experience had improved since product creation, not gotten worse. If anything, the policies warranted COI reductions not increases based on mortality priced V morality experienced.

Jury Trial Scheduled for Proposed Class Action Against Genworth Challenging Excessive Cost of Insurance Increase on Universal Life Insurance Policies

In my experience, the damage has already been done.

I dont know what regulators can do. Maximum Expenses have already been approved in the contract by the regulators.

To my knowledge, carriers dont need approval to increase expenses within the bounds of an existing contract. That would mean those rates being subject to approval twice... ? Does not make sense. And its something Ive never heard of before.

The summary for that lawsuit does not mention regulators. They call it "unlawful" to increase expenses that much... but its in the contract... so its within the bounds of the law unless there are stipulations in the contract about specific triggers to cause an increase in expenses.. which ive never seen before.

What they will definitely get in trouble for is the failure to provide in-force projections when requested. Of course, the whole thing will likely get settled before the jury delivers a verdict. And Genworth UL is among the worst of the worst in my experience.

 

[scagnt83]

True.

However, the back door attack on those is the companies raising the cost of insurance.

Very true. For some policies that is even worse than a rate decrease. Like those old GW policies that allowed a 140% increase in expenses. No wonder they were so "competitive"...