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| *Ostroff, Fair and Company>>>Insurance |
Can whole life insurance premium go up after 20 years and on a fixed income? |
Can whole life insurance premium go up after 20 years and on a fixed income? Traditionally, no. Depends on the type of whole life you have purchased. Universal and adjustable premium life allows for increases in order to keep the policy from lapsing because they did not earn a sufficient return on your money to cover the increasing cost of insurance (consult the cost of insurance index in your origional policy). Regular whole life insurance usually does not. If you feel really ripped off, you could consult your state's insurance commissioner, most have a consumer hot line. But in your case, the states themselves have to approve the increase, so you may not have a case, unless the policy was poorly illustrated (insurance agent lied to you), then you may be able to file a complaint if you can prove the agent lied to you. You should know though, the law is on your side as the consumer in the insurance world. Because you have no role in drawing up the contract, that is it is unilateral, courts defer to the party that had not role in the wording of the contract, allowing vague verbage to be interpretted in your favor. IF it was universal life though, you just made a bad decision, and you should consult an insurance agent with a good MUTUAL insurance company that pays dividends on regular whole life insurance. Some of the best out there are Mass Mutual, New York Life, Northwestern Mutual, State Farm (they push Universal though). I apologize for your problem, it is unfortunate that companies are allowed to create contracts like these in our industry, especially when the companies know they wont work out. Source(s): Financial Planner specializing in Insurance and Retirement Planning If the company you bought the policy originally went out of business and a new company picked up the policy they could raise the premium. If the original company still is the insurer then no they can't. Unless, it is not a whole life policy. If it is universal life or a variable universal life policy then yes they can. it could have always been a "special" whole life policy with a premium fluctuation at 20 years to better cover M&E expenses. Yes. Whole life premiums can go up after ONE year. If you read the small print, they can raise the rates for you as long as they raise the rates for EVERYONE in that class. They can usually do that with the permission of the state insurance commissioner. Fixed income? Most of the people in the world live on a fixed income. Salaries and wages are fixed incomes, too, not just social security or retirement benefits. It's really irrelevant. Sorry. agent, 20+ years If the policy says that the company can change your rate, which affects the premium, at anytime, then yes. In most cases, with whole life policies, premium remain fix until you hit age 100. If you live to age 100, the company will release all the cash value to you without any charges or taxes. |
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