Understanding Recent COI Increases

COI Charges have historically been an uncommon, or even untouched, element that life insurance carriers have adjusted in response to financial pressures. While there have been limited instances of increases in the past 30 years, in 2015 and 2016 several carriers applied increases to COI Charges of certain blocks of in-force policies, mostly consisting of the “Universal Life” type. Even though all increases have been within contractually guaranteed limits and any secondary no-lapse guarantees have remained intact, this break in tradition and the materiality of the increases have raised questions and fomented emotions among advisors and clients.

What are some common reasons causing carriers to increase COI Charges?

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