A fair amount was written in the press recently about a case where an insured, about to turn 100, is going to see his two Transamerica UL policies with a $3.2 million combined death benefit terminate as he hits the century mark.
Gary Lebbin filed a lawsuit against Transamerica in late July, alleging that for decades carriers such as Transamerica sold permanent universal life policies, marketed as “insurance for life,” utilizing outdated mortality tables that did not take into account that Americans are increasingly living past 100.
The complaint says the result has been “the improper termination of life insurance policies that were originally sold to policy holders as ‘permanent insurance.’ The life insurance industry has left its customers (who faithfully paid their premiums with the expectation that they would have coverage for the remainder of their lives) uninsured. Further twisting the knife, these terminations have exposed customers to adverse tax consequences that are in direct contradiction to the guarantees made when these policies were purchased.”
More on this in the link below. If you have clients who purchased UL policies decades ago, is this issue on your radar and have you addressed it with any potential affected clients?
Insurance Forums | Coverage for life