Ameritas Life Insurance Rate Increases: Causes, Policy Impact, and Actionable Options

If your Ameritas life insurance policy cost has increased, the cause depends directly on your specific policy type. Term life policies experience sharp price increases once the initial level-premium period expires. Universal life policies may face higher out-of-pocket costs due to rising Cost of Insurance (COI) deductions or underfunded cash values, while policies with long-term care riders may undergo state-approved rate adjustments.

Understanding Why Ameritas Life Insurance Prices Change

Ameritas Life Insurance Corp. offers a diverse spectrum of life insurance products, ranging from term life to universal life and whole life insurance. While some policy contracts feature rigid price guarantees, others contain flexible or non-guaranteed elements that allow annual charges or overall costs to fluctuate over time.

Determining why your payment or required funding level changed requires identifying the exact mechanism driving the price adjustment. Life insurance rate increases generally fall into four primary categories: contractual term expirations, non-guaranteed Cost of Insurance (COI) adjustments in permanent policies, rider-specific rate hikes approved by state regulators, or premium recalculations following policy changes.

• Types of Ameritas Price Adjustments
  • Term Expiration: Step-up to annual renewable term pricing
  • Universal Life (UL): Cost of Insurance (COI) shifts / cash depletion
  • LTC / Hybrid Riders: State-approved rate adjustments
  • Group / Term Conversion: Age-band reclassifications

Policy-Specific Breakdown: How Price Increases Work

1. Term Life Insurance Expiration (Post-Level Period)

Ameritas term life insurance contracts (such as 10-, 15-, 20-, or 30-year level term policies) guarantee that your premium remains fixed for the duration of the chosen level period. However, once that initial term ends, the level premium guarantee expires.

If you retain the policy beyond the level period, it typically converts to an Annual Renewable Term (ART) policy. Under an ART structure:

• Premiums increase every single year based on your attained age.
• The rate jump between the final year of the level period and the first year of the renewable term is often dramatic—sometimes 300% to 1,000% higher.
• The increase occurs automatically unless you elect to terminate, exchange, or convert the policy.

2. Universal Life (UL) and Indexed Universal Life (IUL) COI Adjustments

Universal life contracts operate differently from traditional term or whole life products. A universal life policy consists of two main components: a cash value account and an insurance cost component. Every month, Ameritas deducts a Cost of Insurance (COI) charge and administrative fees from the policy’s cash value.

Price increases or higher required premium payments in universal life insurance stem from several distinct factors:

• COI Rate Adjustments: Within contractually defined limits (the maximum guaranteed COI rates set in the policy schedule), life insurance carriers reserve the right to adjust non-guaranteed COI rates based on portfolio earnings, mortality expectations, and operational expenses.
• Low Interest Rates or Underperformance: If the crediting rate or index performance credited to your cash value falls below historical projections, the cash value generates less interest. To keep the policy from lapsing, policyholders must pay higher out-of-pocket premiums to cover monthly COI deductions.
• Increasing Age: COI deductions naturally scale upward as the insured individual grows older. If the cash value is insufficient to absorb these escalating monthly charges, the policyholder must increase their premium contributions to maintain coverage.

3. Long-Term Care (LTC) and Hybrid Rider Adjustments

If your Ameritas policy includes a accelerated death benefit rider for long-term care or a standalone long-term care benefit, these components may be subject to rate increases.

Unlike core life insurance death benefits, long-term care insurance risks are pooled across entire policyholder classes. If claims across a specific class of policies exceed carrier projections, Ameritas—like other insurers—can file for rate adjustments with state insurance departments. These increases can only take effect after receiving regulatory review and approval from individual state insurance commissioners, such as the National Association of Insurance Commissioners (NAIC) member regulators.

4. Group and Supplemental Life Insurance Rate Bands

If your coverage is provided through an employer group policy underwritten by Ameritas, premiums are commonly structured in five-year age bands (e.g., ages 35–39, 40–44, 45–49). When you transition into a higher age bracket, your premium automatically increases at the start of the next plan year.

Comparing Rate Dynamics Across Ameritas Policy Types

The table below outlines how pricing mechanisms function across different Ameritas life insurance products, the primary cause of price hikes, and the level of contractual protection provided to the policyholder.

Regulatory Framework and Consumer Protections

Life insurers cannot arbitrarily raise rates on guaranteed products. State insurance laws establish strict guidelines governing how and when insurance companies can modify charges.

Guaranteed vs. Non-Guaranteed Elements

• Guaranteed Elements: Life insurance policies contain explicit tables detailing maximum allowable COI rates, minimum guaranteed interest crediting rates, and fixed schedule premiums. Ameritas cannot charge a COI rate higher than the maximum guaranteed rate stated in your original policy contract.
• Non-Guaranteed Elements (NGEs): Insurers have discretion over current COI rates, expense charges, and credited interest rates, provided adjustments comply with actuarial standards and state regulations. The NAIC Model Governance Regulation requires insurers to maintain formal board-approved criteria when adjusting non-guaranteed elements.

State Insurance Department Oversight

When a carrier seeks to adjust premium rates on rate-regulated products (such as long-term care coverage or group health-related benefits), it must submit actuarial justifications to each state's department of insurance. State regulators evaluate whether proposed increases are actuarially justified based on historic claims data, prospective loss ratios, and administrative costs.

Step-by-Step Guide: What to Do When Facing an Ameritas Price Increase

If you receive a notification that your Ameritas premium is rising—or that your universal life policy requires higher payments to stay active—follow these structured steps to evaluate your options.

1. Request Current In-Force Illustration
2. Audit Policy Contract & Guarantees
3. Evaluate Term Conversion Rights (If Applicable)
4. Adjust Death Benefit or Drop Unnecessary Riders
5. Explore Section 1035 Exchange Options

Step 1: Request an In-Force Illustration

Before taking immediate action, contact Ameritas or your financial professional to request an in-force illustration. Unlike the original sales illustration, an in-force illustration projects the future performance of your specific policy based on its current cash value, ongoing monthly fees, and assumed crediting rates.

Ask Ameritas to run three distinct scenarios:

1. Guaranteed Basis: Shows how long your policy remains active if minimum interest rates and maximum contract COI charges are applied.
2. Current Rate Basis: Shows policy performance if current interest rates and current COI charges remain constant.
3. Target Premium Basis: Identifies the precise annual premium required to guarantee the policy stays in force to age 90 or 100.

Step 2: Review Term Conversion Options

If your price increase is due to the expiration of a level term period, do not automatically pay the higher Annual Renewable Term rates. Check whether your contract includes a term conversion rider.

Ameritas term policies typically allow policyholders to convert their term coverage into a permanent Ameritas life insurance policy (such as whole life or universal life) without undergoing a medical exam or proving health insurability.

• Key Benefit: Converts your coverage at the underwriting risk class achieved when you originally bought the policy, even if your health has declined.
• Deadline Warning: Conversion privileges usually expire at a specific age (e.g., age 65 or 70) or a set number of years into the term contract.

Step 3: Lower the Policy Death Benefit

If your universal life policy demands higher payments to avoid lapse, you can lower the policy's face amount (death benefit).

• Reducing a policy from $500,000 to $250,000 cuts the net amount at risk for the insurer.
• Lower net risk directly reduces monthly Cost of Insurance (COI) deductions, lowering the premium needed to sustain the contract.

Step 4: Restructure Policy Riders

Review all attached optional riders on your policy contract. Eliminating optional features that are no longer necessary—such as accidental death riders, guaranteed insurability options, or child term riders—can reduce monthly administrative fees.

Step 5: Consider a Section 1035 Exchange

If your existing policy is underperforming or carrying high cost structures, you may transfer accumulated cash value into a new life insurance policy or annuity contract tax-free under Section 1035 of the Internal Revenue Code.

• Tax Advantage: A 1035 exchange allows you to roll accumulated cash value into a modern, lower-cost policy without triggering immediate income tax obligations on investment gains.
• Underwriting Consideration: Replacing coverage requires qualifying for medical underwriting on a new policy. If your health status has worsened, staying with your modified current policy or exercising conversion options is generally preferable.

Common Risks to Avoid

• Allowing the Policy to Lapse Unintentionally: If a universal life cash balance drops to zero, the policy enters a grace period (typically 31 days). Failing to pay the required minimum premium during this window results in policy termination, forfeiture of protection, and potential taxable income if outstanding policy loans exceed your cost basis.
• Surrendering Without Tax Analysis: Surrendering a permanent policy for cash value can create taxable income if the cash proceeds received exceed total premiums paid into the policy. Always verify tax basis with a qualified professional before surrendering.
• Paying High ART Rates Long-Term: Paying post-level annual renewable term rates for more than a few months is rarely cost-effective. If you still require coverage, securing a new underwritten policy or executing a term conversion is almost always significantly cheaper.

Frequently Asked Questions

Why did my Ameritas universal life insurance policy require a higher payment this year?

Universal life insurance relies on a dynamic balance between cash value growth and monthly deductions. If credited interest rates fell or monthly Cost of Insurance (COI) deductions increased as you aged, your baseline premium may no longer cover expenses. Additional payments are required to prevent cash value depletion and policy lapse.

Can Ameritas raise premiums on guaranteed whole life policies?

No. Traditional whole life insurance policies feature fixed premium schedules guaranteed by the insurer. Ameritas cannot raise base premiums on a guaranteed whole life contract. However, fluctuations in the company's dividend scale can lower annual policyholder dividends, affecting cash growth or how much dividend credit is available to offset premium payments.

What happens if I cannot afford the higher rates on my expiring term policy?

If the annual renewable term rate after level period expiration is unaffordable, you can exercise a contractual term conversion to a permanent policy without medical re-underwriting, apply for a new underwritten term policy if you are in good health, reduce the coverage amount, or allow the policy to expire.

Can state regulators block rate increases on Ameritas policies?

State regulators oversee rates for specific product types, such as long-term care insurance and certain group coverages. If Ameritas requests a rate adjustment on a regulated product, state insurance departments examine actuarial evidence and can approve, reduce, or reject the proposed increase. Pure life insurance COI changes on universal policies are governed by contractual maximum caps rather than direct prior-approval laws in most states.

What is the deadline for converting an Ameritas term life policy?

Ameritas policies contain explicit conversion windows specified in the policy contract—typically before reaching age 65 or 70, or before the level premium period ends, whichever occurs first. Refer to your original policy document or contact customer service to identify your policy's exact expiration date for conversion rights.

Practical Recommendations

Facing a life insurance price increase requires active policy management to avoid losing coverage or overpaying:

1. Locate Your Policy Contract: Check the policy schedule page to confirm whether your contract is term, whole life, or universal life, and check your guaranteed maximum COI table.
2. Contact Customer Support or Your Financial Advisor: Request an immediate in-force illustration showing current versus guaranteed policy projections.
3. Compare Options Before Modifying: If health remains good, shop the open market for a new fully underwritten policy to compare rates against your adjusted Ameritas premium or conversion quotes.
4. Utilize Free Look Windows on Replacement Policies: If replacing coverage, never cancel an existing Ameritas policy until a new policy is formally underwritten, approved, accepted, and funded.