New York Financial Superintendent Lacewell Warns of Hidden Costs in Universal Life Policies
February 26, 2019 by Elizabeth Festa
New York Department of Financial Services Acting Superintendent Linda Lacewell has issued a consumer alert that talks about hidden costs and risks in universal life insurance policies. It is her first public act since taking the helm of the agency earlier this month.
“Beware of increasing charges,” the consumer alert warns in a message that appears on the website and was tweeted Thursday by the New Department of Financial Services.
Lacewell noted that the internal charges for these policies can increase annually, and can spike in later years as a policyholder ages. These internal charges are funded by premium payments, the existing cash value of the policy and interest credits or investment performance, as with variable UL products.
Consumers need to know that their payments plus the existing cash value of the policy need to cover its expenses or they might lose coverage with a lapse, according to the alert.
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