My guess is 10 years ago the insurance company and or its sales rep suggested that you buy what they claimed would be a single premium universal life insurance policy. You, likeling the concept of something for nothing, took the offer, which turns out to have been pie in the sky.
Then prevailing interest rates enabled the companies to "illustrate" using the high interest rates as though they would last forever. The illustrations they gave you probably showed that based on such projections the interest earnings that would be credited would be sufficienet to pay the cost of insurance forever, without any additional premium outlay, based on current assuptions as to interest and mortality and possibly expenses.
The projections also likely carried some disclaimers in tiny type that they were projections and not guaranteed and that what was guaranteed was an interest rate of about 3-4% NOT the 6-12% they projected. In some cases sets of projections were given, some at high projected interest rates and some at low rates (which showed that trhey would not last forever), but as in the Wizard of Oz, the sales rep likely said "don't pay any attention to the man behind the curtain" low rate ones.
Well, as you know, interest rates fell dramatically in the market. One consequence was that the company was probably earning far less on the money they got from you than they contemplated, and that they thus dropped the rate applied to your policy dramatically, and lo and behold, there is insufficient interest being credited to carry the premium. So sorry, etc.
In addition, the policies likely gave the insurance company the right to raise the mortality charge it placed on the policy after some passage of time, and disclosed the maximum potential mortality charge. Although mortality has actaully IMPROVED in most circumstances over the past 10 years, in some cases the insurance companies have also hiked up the mortality charges to make-up the shortfall on the interest rates. In some policies the company also reserved the right to impose an expense charge in the future.....
This is a combination of greed on the part of sales reps (including brokers and agents) who got handsome commissions on sales of new policies, greed on the part of companies (who are often measured on the basis of new sales rather than other measures (particularly if the sales rep is selling another company's policies), and your own suspension of belief and hope to get something for nothing, or heads you win, tils they lose.
A large number of cases have been brought against many insurance companies for allegedly misleading sales practices and inadequate disclosure. Some of these cases have resulted in MAJOR settlements. But the situations have differed and this is not the kind of suit that you as a sole policyholder can bring on your own, as the cost of the attorney fees you have to lay out are enormous.
First I suggest that you contact your state insurance department and ask for help. They may have information about suits brought against the company in question and relief available. If they are no help, perhaps a class action attorney who has a record of success against insurance companies may assist, and tie you in as a class action plaintiff.
As in any matter, your right to any relief or recovery will really depend on the entire situation and all the facts and circiumstances.
