My mom has 30 year term with Transamerica. She was paying around $400 annually. Now Transamerica just sent her a letter saying that the new premium is about 5700 annually. Can they do this? The term hasn’t even end yet
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There’s “term” and there’s “level term”.
Level term means the premium is the same for all 30 years. If that’s not what she has, then yes.
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It’s probably not a 30-year level term policy. Instead, it’s likely a 20-year level term policy with guaranteed coverage for an extra 10 years under what’s called Annual Renewable Term. This means the rate increases every year during those 10 years, and if your mother is in her 60s or older, the cost will skyrocket each year.
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She must have not read the fine print, how long ago did she get her policy?
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You are correct. She just took out her insurance policy and shows that on 21st year will be around 5000.
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Could Be a grade premium or maybe it wasn’t as many years as she thought .
That sounds like a renewable annual term option with such an increase