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Life insurance rates increase by Transamerica, policy holders sue

Life insurance, as everyone knows, is a very important aspect to the lives of many people all around the country. Paying for that life insurance, though, can be a real pain -- and it is made even more difficult when your insurance provider pushes your rates through the roof. This is even harder to take when the price increase may have been done in breach of obligations under the policy itself.

This is what some people are facing who have been covered under life insurance policies by Transamerica. The company has been sued by policy holders for raising the cost of insurance on some life insurance policies. The allegations include information that the price on the policies have been increasing since August of last year, and that some policies saw a 38 percent increase in monthly charges. The plaintiffs also allege that while Transamerica tried to make it seem that these increase were allowed, they actually aren't.

The basis for this story appears to be that the policies were signed during high-interest times -- and with the low interest rates of today, it is difficult for the insurance companies to pay out the policy.

It will be interesting to see how the lawsuit plays out, but for the time being, there are more questions than answers. Are the changes in price allowed under the policies? Or did Transamerica alter the prices of the policies in an immoral way? 

Source: Investment News, "Transamerica sued for cost increases on universal life insurance contracts," Greg Iacurci, March 23, 2016

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