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Cost of Insurance (COI) Increases

We’re excited to bring you the inaugural edition of our monthly newsletter. Our goal is embodied in the title. We want to make life better for you and your clients by bringing you insights, tips, case studies, and more. We’ll even throw in a quote that is meaningful to us. This month’s quote speaks to our passion for life insurance. We’ve seen how having it can change lives left behind and how not having it can put families in a tailspin. Yes, we know a lot about life insurance, but the fact that it can literally change lives in times of pain and change is what makes us passionate about life insurance.

Cost of Insurance (COI) Increases

Midland National recently announced massive cost of insurance increases on some policies. Affected policyholders are being sent detailed letters outlining the detrimental changes.

Real Life Impact

The change on one policy dropped the coverage period from age 100 down to age 79. The new premium required to keep the policy to age 100 was $13,150, but we were able to suggest a restructure to the existing policy that would keep coverage to age 100 with only $8,898 in premium.

LT3D in Action

We proactively reached out to our impacted clients to discuss options for their specific policies and provided a special report to help trustees communicate the information to affected parties.


If you get a letter from a carrier related to a price increase, be sure to let us know so we can navigate the new waters together. The right course may differ from client to client so it’s important to vet the options available.

“No one knows how much you know until they know how much you care.”

—Theodore Roosevelt

Deep Dive: COIs

  • COI charges are a monthly charge against the cash value based on the difference between the death benefit and the cash value – known as Net Amount at Risk (NAR).
  • COI charges are calculated as a rate per $1,000 of NAR.
  • Contracts provide the maximum charge per $1,000 but carriers usually charge much less than the max. Carriers can change what they charge under contract terms.
  • COI rates generally escalate over time, but the Midland policies originally had almost flat rates. The new rates for the example above increased by 469% on average!
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