Northwestern Mutual offers a variety of whole life insurance policies including 65 Life, 90 Life and Limited Pay Life. The insurer promises you will only pay premiums until age 65 or 90, respectively, with the first two of its whole life policies.
The insurer claims that once you reach the designated age, “you’ll have life insurance with no more payments due for the rest of your life.” Limited Life Pay, another option, instead lets you pay for a period of 10, 15, 20, 25, or 30 years and then stop paying while still maintaining coverage.
The idea of these whole life policies can seem attractive, especially as whole life coverage not only ensures a death benefit is always paid but also has an investment component, which allegedly can provide you with income when you retire. Unfortunately, there are often substantial hidden costs and fees, which can make whole life coverage a bad investment.
If you are sold a policy that is inappropriate for your situation or if you are the victim of dishonest marketing in connection with whole life policies, you should contact a California financial elder abuse attorney as soon as possible.
Are There Hidden Fees in Whole Life Policies?
Some of the unexpected fees that policyholders often end up paying when purchasing whole life policies include:
- Administrative costs: Commissions to insurance agents are just the beginning. There may be a wide variety of administrative costs.
- Surrender charges: If you want to get out of a policy, you could end up paying a substantial surrender charge.
- Liquidity charges: Depending upon the policy purchased, you may be charged to access the funds in your own account. This type of fee can also be called administrative charges for withdrawals.
Often, it is difficult for consumers to find specific information on the fees to be paid. Fee schedules are generally buried in fine print, if consumers are given a copy at all. Policy documents can also be difficult to understand, and policyholders may not always be able to ascertain what specific fees apply in their situation- especially as fees can vary across policies and as fees can change depending upon how long the policy was owned for.
In an SEC filing document for a variable life policy from Northwestern Mutual, the extent of high fees was made clear. For this particular policy, the premium surrender charge was up to 40 percent of the sum of the annual premium for the Minimum Guaranteed Death benefit, as well as a term life premium for the initial amount of additional protection which was provided.
Contact the Evans Law Firm, Inc. Today for Help
Finding out about substantial costs and fees after you have already purchased a whole life policy can be devastating, as you may be locked in and will need to keep paying premiums to protect your initial investment. Trying to escape the investment can become so costly that you could feel as if you have no choice but to continue down a path that is fraught with the potential for unexpected expenditures.
You do not have to just accept this fate, though. Our financial elder abuse attorney can help you take action if you believe you were misled by bad investment advice and marketing that failed to disclose hidden costs and fees. Call the Evans Law Firm, Inc. today to speak with an attorney to find out what your options may be for trying to recoup losses and protect your financial security.