"competency, thoroughness, and integrity"

"unparalleled understanding of life insurance products:

"a very credible and persuasive witness"

"an impressive level of insurance expertise"

A qualified expert providing life insurance company product consulting services to the insurance and legal services industries.

Specializing in these Life Insurance company product consulting services:

  • Marketing, Training & Sales Support
  • Product Design & Development
  • Expert Witness on Litigation Matters

For more details on the services available, please visit the Services page.

Contact Theodore E. Affleck via email, phone, or letter as the initial step in the process of determining if he would be a suitable expert / resource for your company.


Mr. Affleck has been asked to serve as a plaintiff's expert witness in several class actions that have been recently filed. Life insurance companies have recently notified policy owners of an increase in the internal cost of insurance (COI) rates for in-force universal life contracts. The class actions allege that the primary purpose of these increases is to offset underlying guaranteed minimum interest rates that ranged from 4.0% to 5.5% when these policies were issued back in the 80's & 90's. Most life insurance companies have already lowered the current interest rate they are crediting to existing universal life insurance policies to their contractually guaranteed minimum interest rate.

Theodore E. Affleck, CLU & Associates, LLC

403 Cedar Street

Newington, CT

Phone: 860.335.4034

Email: taffleckclu@aol.com

Latest News Continued

Nevertheless, many life insurance companies are still forced to credit more interest than what they are earning, i.e., they are losing money on that negative spread. Those decreases in credited interest rates will also negatively affect universal life account values which will not grow at the rate originally envisioned by the initial sales illustration. To further aggravate the situation, many life insurance companies have already increased "current" expenses, e.g. sales loads and admin expenses, up to or close to their contractually guaranteed levels.

But the largest impact on universal life insurance policy values is the recent spate of increases in COI rates, which are the largest monthly deductions from a policy's account value. Every universal life insurance policy includes a page of contractually guaranteed monthly COI rates based upon actuarially endorsed mortality tables (since the mid-1980s, the 1980 CSO Table and more recently the 2001 CSO Table). The rates are based on the insured's gender and risk classification and increase each year as the insured's age increases. But virtually all life insurance companies use a "current" (i.e., lower, sometimes by as much as 40-60% lower) schedule of monthly non-guaranteed COI rates in a sales illustration and then administer their existing universal life policies under the same "current" schedule. The lower "current" rates reflect the company's anticipated future mortality.

At least they did so until recently. The recently announced increases in the "current" COI rates narrows the gap between current and guaranteed COI rates. The combination of decreases in crediting interest rates, increases in sales loads and admin fees, and the unprecedented increases in current COI rates is putting an enormous stress on a universal life policy's sufficiency to cover monthly deductions. In most instances, the policy holder will have to increase premium outlay (in some cases by as much as 50-100%) to prevent the policy from lapsing. The class action lawsuits allege that these COI increases either contradict contractual terms and/or are simply an effort by the insurance industry to stem the loses they created in the first place by their sales and marketing practices.