Very recently, we received the first notice (Notice of Change in Non-guaranteed Elements of your Policy), Transamerica Raises COI, in what appears to be another wave of COI increases from Transamerica Life Insurance Company. As to why this increase is taking place, the multi-page letter indicates the following:
What’s Changing and Why
“Once a month, Transamerica withdraws a monthly deduction from the policy’s accumulation value (i.e., the cash value). The factors that affect the monthly deduction rates are outlined in your policy. Starting on your next policy anniversary date after February 28,2022, your original monthly deduction rate will increase by approximately 61%. The increase is in addition to customary increases associated with age. Even after the change goes into effect, your new monthly deduction rates will never exceed the policy’s maximum monthly deduction rates guaranteed at the time the policy was purchased.”
Further down in the letter, they provide a statement about the timing (age and policy year) of when the policy will lapse if we pay the premiums as scheduled and no changes are made to the coverage.
They also include a summary of the policy that includes the last policy anniversary, face amount, current accumulation value and current cash value minus any policy loan. Because the increase will negatively affect the policy, we include a series of action options that may include the following:
- Retain current face amount – take no action
- Pay additional premium
- Reduce face amount
- Surrender your policy
- Other options
Lastly, at the end of the letter is an Appendix of the Monthly Deduction Rate Scales. This includes the current, increase and guaranteed rates.
We contacted Transamerica to gauge the extent of this increase and the Service Rep indicated that she couldn’t disclose the list of products that will experience an increase but did acknowledge that there are 9 products involved. The letter is tied to a TransUltra 115 policy, but all policy owners will need to wait for their policy specific letter to confirm if this impacts their policy. We will continue to follow up on this issue with Transamerica and we will provide additional updates as they are available.