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As promised in my last post this is a letter written by a 79 year old man in Ohio to the state insurance commissioner. He was sold a conversion on a term policy 10 years ago and was told by the agent that it would be a paid up, guaranteed in force forever policy, in 20 years. It now appears it will lapse in the near future.

July 16, 2012

The Ohio Department of Insurance

50 W. Town Street

Third Floor – Suite 300

Columbus, Ohio 43215

(614) 644-2658


Dear Sirs/Madams:

I feel duped, betrayed, highly vulnerable, deceived or totally led astray.  I believe that the agent(s) who sold me ‘life’ insurance in 2002 misrepresented the policy.

I have an insurance policy originally taken with Federal Kemper with a face value of $205,000.  I am now informed by the new owner of that policy, Protective Life, that the policy’s face value will reduce to $100,000 when I turn 80 (October of this year)., that, in the near future, my policy will lapse with no death benefit for my wife and/or that I will have to pay a VERY high annual premium (unspecifried) in order to have an unspecified face value.  (“Protective Life’ appears to be a very deceptive oxymoron.!)

  1. My original agent was John Anonymous.
  2. In 2002 (at age 70) when I was in perfect health, I traded my $300,000 term insurance for (what I thought was) Life Insurance.  (Only recently did I come to understand that the policy I bought, universal life, was a variant of term insurance and that, instead of being paid up in full, the premium would escalate drastically as I got older.)
  3. I was told that paying a premium of $4000/yr would have me paid up in full in 20 years.
  4. Federal Kemper was bought by Chase which was bought by Protective Life.
  5. In the last three or four years I started receiving financial statements from Protective Life, although I did not know why.  I thought some of the data were interesting but I was not concerned because I ‘knew’ I had life insurance.
  6. About May of 2012 I received notice from Protective Life that several things would happen:
    1. on my 80th birthday I would no longer be insured or if I was I would have to pay a higher premium.  No amount was specified.  What else might happen I couldn’t tell because I was not sure of all that was written and how confusing it was because I had ‘life’ insurance.
    2. My cash value of the policy was dropping drastically.
    3. I did not have life insurance; rather I had universal life (which I thought was life insurance).
  7. In April (I believe) I called Protective Life for a copy of my original policy.  It never arrived.
  8. I wrote for a copy of that policy.  The letter was never answered.  I wanted to see if what was happening was stated in my original policy.
  9. I called again for a copy and was told I would receive it.  Again, no such copy arrived.
  10. I wrote for a copy of my policy.  In the mail I received an application for a certificate of insurance.  I was furious.
  11. I called Protective and asked for a manager whom I told I never asked for nor needed an application for a certificate of insurance.  He said he would send me a copy of my original policy if they could find it.
  12. I called again and wanted to know what it would take for me to continue my insurance.  Protective Life sent me an ‘Illustration.’  In that document were terms I didn’t understand such as ‘guaranteed assumptions’ and ‘non-guaranteed assumptions current.’

I called Protective to have them explain what this was all about.  But first I asked to speak to a manager to find out why I still had not received a copy of my original policy.   I was switched to another department.  I spoke to a gentleman who told me that Protective did not have a copy of the original policy but he could send me a form that was in force at the time and also the original application I signed with Federal Kemper.  I then asked to be switched back to the original desk so I could be informed about the meaning of the ‘Illustration’ sent to me and the terms therein.  The line was busy and, despite my calling back several times I could get no more than a busy signal or a voice that asked me to  ‘leave your info and we will call you back’

  1. In order to understand the ‘Illustration’ I went to a local insurance agent and asked for his help.  I found out that the ‘guaranteed assumptions’ was the flat 4%.  The non-guaranteed assumptions’ was a set of rosy numbers showing what  Protective’s  investments on my policy would be valued at.  But, the non-guaranteed assumptions didn’t apply to me because I was only guraranteed 4%.   Why the second column (non-guaranteed) was there, I can only guess.   The full meaning of the elements of this paragraph are still unclear to me because I have been unable to get full clarification from Protective and what I now ‘know’ was clarified only by my local insurance agent, not Protective..
  2. I asked my local insurance agent if he could get me insurance to possibly replace this policy.  We tried but I now have a) elevated (but under control) blood pressure, b) sleep apnea and c) psoriasis.,   In 2009 I had an aortic valve replacement (bovine valve) and I now function well and am in good health for a 79 year old.   For these reasons and age, however,  I cannot get affordable replacement insurance.
  3. My wife will be 65 this month.  She has congestive heart failure and is unable to earn a living.  My “life insurance” was meant to see that she was able to be cared for upon my death.  She is now facing the aspect of having no way of receiving needed care.  We are aghast!  How could this happen?
  4. I have just paid another $1000 for the third quarter of 2012 even though my death benefit is threatened to be reduced to $100,000 when I turn 80 and even though as I make this payment my surrender value (according to my ‘illustration’)  will also plummet by $5007 and my ‘life insurance’ will not cover me for the duration of my life. (It appears to cover me until I’m 82).

I make this payment so, as a current insured, I can ask the Ohio Department of Insurance if the above is legitimate.  I believe my ‘life insurance’ (universal life) was misrepresented in so many ways, that Federal Kemper and Chase neglected to send me ‘statements’, that Protective Life has stonewalled me, attempted to divert my efforts to gain information, misinformed me and may even have been violating the terms of my original contract with Federal Kemper (but they don’t have the original contact).

I believe that the insurance I was sold in 2002 was misrepresented to me.  Why else would I surrender a $300,000 policy for one at $205,000 and a $4000 yearly premium which I then (and now) thought was a very high premium.  I never knew it would ‘expire.’  I did not know my annual premium would go up to $12,000.  (Please note;  Protective never told me this.  I can only assume this from their “Illustration.”)  I never knew that my cash value would totally disappear (as per‘Illustration.”)

With Federal Kemper and with Chase I never received ‘statements’, which I now am told is a violation of insurance rules.  With Protective Life I am not answered, misdirected, sent ‘forms’ without having anyone to explain them to me, delayed, etc..

I am aware that “The mission of the Ohio Department of Insurance is to provide consumer protection through education and fair but vigilant regulation …”  I ask for your protection.  I hope that your regulations do not permit the above actions/inactions.  I ask for your speedy assistance in this matter because my next payment will be due in October when I turn 80 and I don’t want to continue in fear and ambiguity and ever-decreasing ‘surrender value.’  I might make a choice to surrender the policy now and use the money to create my own savings account to provide some ‘insurance’ for my wife.  If I wait until October my surrender value will drop considerably.  And so, I beg of you to respond as quickly as possible so that, in some way,  I can resolve the above issues.

In advance I thank you for your assistance.

Sincerely and with much frustration,

Bottom line. This is not part of the letter above. These are my opinions. This is an all too common occurrence. Agents say what they need to say to make the sale even if it puts the client’s family in jeopardy down the road. If the last 10 years had been an economic home run this would have been an issue, but anyone selling products assuming an endless streak of home runs is lying to their customer. If you have any questions or have a policy that isn’t working out like you were led to believe it would, call or email me directly. My name is Ed Hinerman. Let’s talk.