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Apr 14, 2016 by |

A Closer Look at Athene USA: Understanding the Risks of Indexed Universal Life Insurance

Athene USA is a subsidiary of Athene Holding, Ltd.  It is licensed to sell products in all 50 states throughout the U.S. There are approximately 25,000 independent agents who sell annuities and insurance products offered by Athene Holdings. More than 769,000 policies have been issued by this major insurance provider, which explains on its website that its “acquired companies have a proven track record of serving customers for more than 100 years.”

In 2013, Athene sold much of its life insurance business to Accordia Life and Annuity Company, which is a subsidiary of Global Atlanta Financial Group Limited. While Athene continued administering its life insurance policies for a two-year transition period, all of the life insurance policies affected by the sale made the final transition to Accordia Life in the early part of 2016.

Policyholders must understand how their policies are affected, as well as what changes are legally permitted when insurance companies change hands. A San Francisco financial elder abuse attorney can provide assistance if policyholders face unexpected costs, fees and losses.

Unfortunately, insurance policies do not actually have to change hands for policyholders to face surprise fees. One of the most popular insurance products marketed to consumers is indexed universal life insurance. This type of life insurance often comes with promises of gains which are too good to be true and often results in high unexpected expenditures. If you have or are considering an indexed universal life policy, knowing the risks is essential.

Know the Risks of IUL Policies

Indexed universal life policies typically are marketed as a safe investment vehicle in which policyholders have coverage in case of death and have the opportunity to accrue an investable cash value in their insurance policies.

The policy is intended to be held for the duration of a policyholder’s life and the policyholder is given the opportunity to allocate the cash value investment portion of the policy into either a fixed account or into indexed investments.  Policyholders are often told their principle balance on investments in equity funds will be protected; however, there is also usually an upper limit on gains when policies protect against principle loss.

Those who purchase indexed universal life policies may believe they are getting a safe investment that will provide for them during retirement. Unfortunately, costs rise as the policyholder ages. While the excess costs are supposed to be paid with accrued interest, there’s not always enough money accrued to cover the fees.  This is just one of many unexpected surprises that can occur, but it can be detrimental because policyholders may need to bring in outside money.

Policyholders may face other unexpected expenditures, or they may be surprised by high surrender fees and find they do not get the benefits promised when the indexed universal life policy was purchased.  Furthermore, the risks for policyholders of unexpected surprises may be exacerbated when insurers change hands.  Mergers and acquisitions, like those involving Athene’s life insurance division, are very common.

Get Help from a Financial Elder Abuse Attorney Today

If you believe you sustained financial damage resulting from an insurance company sale or acquisition, or if you believe your finances were adversely affected by inadequate investment advice, the marketing of inappropriate investments, or misleading promotional materials, consider getting legal assistance. The Evans Law Firm, Inc. may be able to help you recover lost funds in a claim for compensation. Call us at 415-441-8669 or toll free at 888-503-8267.


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