Major insurers are breaking a long-standing industry taboo of raising rates on life-insurance policies they sold to consumers years ago, in the latest fallout from a prolonged stretch of low interest rates. ... Her family faces a 15% increase next year, amounting to tens of thousands of dollars, for an 80-year-old family member’s multimillion-dollar coverage, with additional increases over the next few years. Among her options: selling the policy to investors in the industry’s secondary market.
Insurers are raising costs of ‘universal life’ coverage sold years ago, as they confront low interest rates

By: Leslie Scism
The Wall Street Journal, 04 December 2015

Major insurers are breaking a long-standing industry taboo of raising rates on life-insurance policies they sold to consumers years ago, in the latest fallout from a prolonged stretch of low interest rates.

...

“I find it really challenging that the insurance industry has the ability to institute sharp increases such as this, and the consumer is left with very little option as to what to do,” said  Michelle Clements, president of Synergy Trust Co., a private family trust company in Sioux Falls, S.D.

Her family faces a 15% increase next year, amounting to tens of thousands of dollars, for an 80-year-old family member’s multimillion-dollar coverage, with additional increases over the next few years. Among her options: selling the policy to investors in the industry’s secondary market.

READ MORE [Subscription Required]

All news