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What’s Behind the Increase in Cost of Insurance Charges?

What’s Behind the Increase in Cost of Insurance Charges?

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Some life insurance carriers have begun to announce increases in the cost of insurance (COI) on certain closed blocks of outstanding universal life (UL) products. “COI” refers to payments of claims and is the largest single cost incurred by life carriers. COI charges can account for 75 percent to 85 percent of the total premium. An increase in COI charges will have an immediate economic impact on non-guaranteed policies, forcing policyholders to make some hard economic decisions.

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