21 year-old whole life policy premiums going up and can't afford any longer

Posted in Life Insurance Questions over 2 years ago, 3 replies

We have two whole life policies that we took out at age 32 - one for my husband and one for me (spouse) - worth $250,000 earch. We paid into them for 9 years - two years more than we were quoted by our agent of the time. Now 21 years later, we are told that our premiums are going up - substantially!! From $1,500 nearly $3,000 annually per policy! Our dividend payments will not cover these costs. We bought these policies knowing that once we paid into them for a duration, we would never have to pay into them again.

Our insurance provider wants us to pay $3,000 per premium - out-of-pocket - for a total of $6,000. How can this be? The customer service rep told us that we have a policy that stated our premiums would go up after 21 years. We were never told this let alone understood this would ever happen.

At this rate, we cannot afford to keep our whole life policies. We have paid well over the $250,000 these policies are worth through our original cash outlay and annual dividend payments. Now they want more from us when our employers can't even give us COL raises annually. We do not have $6,000 to pay for these policies. We feel robbed that an insurance company would do this to us after all these years. They have all of our money - money we thought we could always borrow against if we had to - and we will end up with nothing if we do not pay the full amount due.

We do have a term policy on my husband, but not one for me. Any recommendations on how we can resolve this situation with our whole life policies? Are there alternative products we could consider?

Thanks for any help you can provide.

submitted by Diane in New England

You probably have a copy of the life insurance policy in your files. Check out ifwhat their customer rep is saying is true. If the policy states that premiums will go up after 21 years, then there is not much you can do about it. If the clause is not there, you should take it up with the company and perhaps check with a lawyer.

Again, if it is true, you could try surrendering the policies for what they are worth or if you want to get a better price, you may want to look into a life settlement. Life settlements involve selling your whole life policies to a third party. After you die, the third party will get the death benefits. A life settlement has become popular these days, and will get you more cash value for your life insurance policy than the surrender value a life insurance company will pay.

Denise

submitted by DeniseM in Wheeling @ May 24, 2011 - 02:27 AM

Sounds like the Prudential policy. I have the exact same thing and just been told my annual premium has gone from $2915.50 to $7233! i was never told this would happen. i was sold that whole life means the premium will NEVER go up. I paid the premium every year and let the investment returns purchase additional insurance. There was absolutely no communication from Prudential over the 21 prior years except for a premium bill once a year. In my view this is a mis-sold policy and there must be millions of them out there. Here in the UK the banks have to pay Billions of dollars for payment protection insurance attached to loans and mortgages that was not explained properly.
This should be a class action suit for mis-sold whole life policies. Whole life was sold that the premiums never go up - unlike the term life which expires and becomes more expensive every year as you get older and need to renew it. Now 21 years Later they arbitrarily come and assign a new premium much, much higher than before. The policy i have is US based to avoid any confusion.

submitted by Peter in London @ May 15, 2012 - 11:51 AM

I just received a payment booklet where my insurance premium doubled with prudential. No prior notice, and was told that they no longer have the signed contract from day one. My father passed and took these policies out for my sister and I 21 years ago. I will be researching and writing letters until I get a valid reason

submitted by JayB in Sc @ January 30, 2013 - 08:11 PM

Write a Reply

Instant Online Quotes

Save Up to $475 a Year on Insurance.