Parties agreed to settle this case in the 7th US Circuit Court of Appeals.
Briefly, the case was about policyholders who selected a Reduced At Age 65 payment option. These PHs elected to pay a higher premium before the age of 65 in exchange for a half-pay once they reached the age of 65. Policyholders usually did this on the premise that during their pre-retirement years the higher premium would still be affordable; but, once retired, the half-premium would be affordable on a reduced fixed-income and, with the understanding that the half-premium was a fixed amount in the contract, that there would be no premium volatility.
Meanwhile, the carrier had other plans as time went on. It was their belief that they could raise premiums like the many that chose to pay annually. It turns out not to be the case.
This raises the question for PHs with contracts from other carries or other payment options. Does this case offer them any possibilities? You be the judge.
There was one other ruling from the case that is very important, but you have to read the case with discerning eyes. A quiz later on.
