AXA will be raising the cost of insurance (COI) on a limited number of Athena Universal Life II policies, effective with the first monthly deduction that occurs on or after January 1st, 2016. Like most other carriers raising costs, AXA is emphasizing the new rates will not exceed the guaranteed maximum COI rates as specified in the policy.
The Athena Universal Life II policy does contain a death benefit guarantee, the Lapse Protection Rider (LPR.) The new COI rates will not increase the premium needed to keep the LPR in force, as long as no loans are taken on the policy and no changes are made to the policy. Policies without the rider, will need additional premium to keep the policy from lapsing.
The increase is limited to policies originally issued to those over age 70 with face amounts of $1M or more. AXA is allowing those with face amounts above $1M to lower their death benefit below $1M so as to not be affected by the cost increase, though positive results should be reviewed because of banding and surrender charges.
AXA has already notified brokers, and letters to alert policyholders went out starting October 5th. Illustrations with the new rates are available and AXA is waiving their illustration fee for the rest of the year for up to three policy inforce variations.
We will be reviewing the cost increase and will be publishing future Blogs with our results. We have also scheduled a Webinar concerning the COI increases in general for later in October. Visit our website at www.itm-twentyfirst.comfor more information.