Legal Question in Insurance Law in Florida

Variable Annuity w/Life Insurance Benefit

My husband put $50,000 cash into the subject policy that provided $150,000 life insurance in 1987 at age 63. The annual premium was $5,580. The agent told us that the policy would maintain itself paying the premium out of the interest & dividents so we never made a payment. He is now 84. All was going well until last month when we got a letter stating there was not enough value left to maintain the policy & if we want the policy & life ins. we should pay $5,580 within 60 days which will keep the policy active for 3 months. That means the premium is now around $20,000 yearly. We never knew the premium was going up every year as we always got the same premium notice for $5,580 up through 2008. When I asked the co. rep why she stated that it was the company's practice not to notify their clients of a premium increase and to send the same premium notice every year of the policy life. The sum of the monthly deductions which are on the 2008 statement are around $17,000 but it is not clear that the deductions are for premium. We were never told that my husband could outlive this policy or that it would eat itself up. There is more I would like to add but am running out of characters so if an atty responds I can give more info. Thank You


Asked on 4/02/09, 9:36 pm

1 Answer from Attorneys
Alan Wagner Wagner, McLaughlin & Whittemore P.A.

Re: Variable Annuity w/Life Insurance Benefit

You should speak with a lawyer. The critical issue in these cases is not what you were told by some agent but what was in writing. The most important writing, of course, is the policy itself. The next most important writing are the letters, ads, and marketing materials that themselves may have made promises. What the agent says is almost always irrelevant because you can't prove that he actually said it. Let's face it, that was 21 years ago. Unfortunately, usually, the claims are actually made with a set of assumptions regarding the basic market and the performance of the invested assets. The recent downturn has, as I am sure you can imagine, badly affected all previous wealth projections.

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Answered on 4/03/09, 9:04 am


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