FoIB Jeff M tips us to this story about Conseco Life Insurance Company's recent travails with their interest-sensitive whole life plan:
"Insurance regulators from California, Florida, Indiana, Iowa and Texas led efforts to come to terms with Conseco Life Insurance Company ... The settlement affects consumers who bought Lifetrend whole-life policies from Conseco Life from 1978 to 1997."
Interest sensitive whole life plans (ISWL) were a popular alternative to universal life policies, offering potentially greater cash value guarantees. The problem arose when some unscrupulous (and/or ill-trained) agents began using them as the funding vehicles for something called "vanishing premium life." In its heyday, VPL was touted as a "guaranteed" method of owning a completely paid up life insurance policy in a few short years. The benefits included a reasonably short premium payment period, guaranteed death benefit and cash value, and some significant tax advantages.
Which reminds me: I have a bridge to sell you...
In the event, many (perhaps most) of these plans failed to perform as promised, with the result that unsuspecting policyholders ended up owing more premiums (often a lot more premiums) to keep their plans in force. Under the agreement, Conseco has agreed to pony up some $10 million that will (presumably) go towards paying down those premiums.
Folks who bought a Lifetrend policy from Conseco will be hearing from them shortly with details and contact information.
"Insurance regulators from California, Florida, Indiana, Iowa and Texas led efforts to come to terms with Conseco Life Insurance Company ... The settlement affects consumers who bought Lifetrend whole-life policies from Conseco Life from 1978 to 1997."
Interest sensitive whole life plans (ISWL) were a popular alternative to universal life policies, offering potentially greater cash value guarantees. The problem arose when some unscrupulous (and/or ill-trained) agents began using them as the funding vehicles for something called "vanishing premium life." In its heyday, VPL was touted as a "guaranteed" method of owning a completely paid up life insurance policy in a few short years. The benefits included a reasonably short premium payment period, guaranteed death benefit and cash value, and some significant tax advantages.
Which reminds me: I have a bridge to sell you...
In the event, many (perhaps most) of these plans failed to perform as promised, with the result that unsuspecting policyholders ended up owing more premiums (often a lot more premiums) to keep their plans in force. Under the agreement, Conseco has agreed to pony up some $10 million that will (presumably) go towards paying down those premiums.
Folks who bought a Lifetrend policy from Conseco will be hearing from them shortly with details and contact information.