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Aug 18, 2015 by |

Transamerica Life Insurance Company Raises Cost of Insurance Charges on Universal Life Insurance Products


Consumers should be aware that insurance companies can raise the Cost of Insurance (COI) rates on non-guaranteed life insurance products, resulting in higher monthly policy charges. When there is a change in expectations as to future experience, insurance companies can increase the current COI rates to no greater than the guaranteed maximum COI rates shown in the policy schedule.

Transamerica Life Insurance Company recently announced that it will raise the monthly charges on certain universal life insurance products sold between 1987 and 1998. These increases began with policyholders whose contracts have an anniversary date of August 1, 2015.

Transamerica said that the increases are necessary “to address the expectations as to the future costs of providing coverage. The percentage of the increase varies by policy, but [Transamerica] does expect some of the increases to be substantial.” Life insurers have the ability to raise expenses within non- guaranteed life insurance products (whole life, universal life, variable life and index universal life insurance), although this practice is not common.

Policyholders should request current inforce illustrations from Transamerica which will reflect the forthcoming rate increases and discuss potential funding alternatives. Affected policyholders should receive letters from Transamerica within 45 days of their policy’s anniversary date.
Cost of insurance (COI) charges can often account for 75-85% of the total premium. Policyholders should be sure they know what they are actually being charged for COIs, and whether they have been increased. According to the National Association of Insurance Commissioner, 62 percent of people with life insurance policies do not know quite what they purchased or why.

Evans Law Firm, Inc. handles insurance fraud and annuity fraud lawsuits. If you have purchased a life insurance or annuity policy through Transamerica and want to know if it was a suitable investment for you, please contact Evans Law Firm, Inc. at 415-441-8669 or via email at

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