New Yorkâs Department of Financial Services yesterday (February 21) issued a consumer alert, warning residents to exercise caution if they own or are thinking about buying a universal life insurance policy.
DFS has received a higher than average number of consumer complaints about these policies, and many consumer groups and media organizations have also reported consumer issues with universal life insurance.
They urge all New Yorkers to carefully reviewÂ their policies, the sales illustrations, and all required information disclosures to ensure they understand how the policies work, as well as the potential risks.
Universal life insurance is a type of âpermanentâ life insurance, meaning that it can provide coverage for the policyholderâs entire life.
However, consumers should know that these policies come with unique issues, among them that the internal charges of such policies can increase every year and that flexibility in timing and amount of premium payments can affect coverage.
More information is available at dfs.ny.gov.