At ITM TwentyFirst, it is our goal to keep our clients informed of industry wide news that may affect how life insurance assets are managed now and in the future.
Voya Financial, in letters to clients that began about a month ago, announced cost increases in some of its Universal Life (UL) policies. According to information from the carrier, the increases were in three areas: Monthly Cost of Insurance, Percent of Premium Expense Charge – the “charge assessed as a percentage of each premium paid” and Monthly Expense Factor – a charge “based on the Accumulation Value of your policy”.
Voya, which rebranded from ING US in April of 2013, noted in an FAQ to clients that they “periodically review costs associated with their policies” and that the increases were “being made in response to an increase in the anticipated costs of providing future coverage”. They noted that the increase will take effect on the “first Monthly Policy Date on or after October 1, 2015” and, like other carriers who have raised costs, provided options for the policyholders that include: taking no action, paying a higher premium, reducing the death benefit or surrendering the policy.
In conversations with representatives from the carrier we have been told that the policies affected were “all Universal Life policies issued before 2009”. We were also given the following list of policies affected by one or more of these increases:
- Security Design I & III
- Estate Design (RL) and NY
- Life Design GUL
- Premier Design
- Strategic Accumulator UL
- Select Design
- GPUL (version 1, 2, and 3)
In reviewing the client letters that we have received so far the highest increase in monthly Cost of Insurance we have seen is 42.3%, but we are still analyzing the policies we manage to determine actual increases. This is another notice from a major carrier of a cost increase and we will be monitoring the situation as we move forward.
ITM TwentyFirst is a leading provider of ILIT administrative services, life settlement portfolio services and medical underwriting. We are monitoring the impact of these changes for all ITM TwentyFirst clients.
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