Thousands facing 'sticker shock' thanks to new term life insurance rates
BATON ROUGE - Thousands are facing term life insurance 'sticker shock' as rates take a big jump for people enrolled through the state's office of group benefits.
Marilyn Person is one of the many facing the sudden spike in cost.
"I thought it was incredibly unreasonable."
A letter was sent to her husband from the Office of Group Benefits, regarding the renewal of their term life insurance. It also alerted them to the change in their monthly payments, namely that they'd have to pay six times more than usual.
"It had gone from the 12-something range to $76," Person said.
The Office of Group Benefits says people have been paying virtually nothing for the past 12 years. But when it renewed its contract with Prudential, the rates skyrocketed.
Person's husband is retired from the Department of Agriculture. He'll be 90 in January and she has no plans to drop the term life insurance.
"I just thought it was wrong," Person said. "I have some income from retirement and he has his, but there are people in our age bracket who don't have any."
The changes affect 66,000 enrolled through the Office of Group Benefits. About 44,000 of them are retirees.
Amid all of the complaints, the contract's been tossed out for an emergency rebid. It's not clear what the new rate will be, but it likely won't be as high as Person was quoted.
The OGB says it should have more information by the end of the week. People affected by the policy will be given extra time to make their decision.