A Kansas City Life survivorship policy can sometimes be sold, but the number that decides it is not the face amount — it is the monthly cost-of-insurance charge, and on this particular carrier that charge has been the subject of a decade of federal litigation. If you own a Kansas City Life universal life contract of any kind, the cost-of-insurance line on your annual statement deserves more attention than anything else in the file.
Kansas City Life Insurance Company is a Missouri-domiciled insurer regulated by the Missouri Department of Commerce and Insurance. The group has historically included affiliated companies, among them Sunset Life Insurance Company of America and Old American Insurance Company, so the first practical step is confirming which legal entity actually issued your contract — the name on the letterhead of your annual statement is not always the issuing company.
What follows: how cost of insurance drains a universal life contract, what the public record in the Kansas City Life class litigation established and what it did not, why second-to-die pricing is harsher than single-life pricing, the specific moments when a survivorship policy stops serving any purpose, and the exact document request that answers your question.
In This Article
- Confirm What You Own Before You Value It
- Cost of Insurance Is the Mechanism That Kills These Policies
- What the Public Litigation Record Shows — and What It Does Not
- Why Second-to-Die Contracts Price Lower
- When the Policy Has Genuinely Outlived Its Purpose
- If a Trust Owns It, the Trustee Decides
- The Document Request That Answers Your Question
- Frequently Asked Questions
Confirm What You Own Before You Value It
Open the contract to the schedule page and read the insured line. A survivorship or second-to-die policy names two insureds, carries one policy number and one death benefit, and pays nothing until the second insured dies. If you find two policy numbers and two premium schedules, you own two single-life policies — a much simpler and generally more valuable position, and each contract should be evaluated on its own.
Then identify the chassis. A survivorship whole life contract has guaranteed cash values and a guaranteed premium; the risks are dividend-scale reductions and, if you borrowed, loan interest. A survivorship universal life contract has an accumulation value assessed monthly for cost of insurance and expense charges; the risk is that those charges outrun the crediting rate and the policy quietly heads toward lapse. Kansas City Life has been a substantial universal life writer for decades, so most survivorship contracts in circulation from the company are on a universal life chassis.
That distinction determines which of the next two sections matters to you.
Cost of Insurance Is the Mechanism That Kills These Policies
In a universal life contract, the carrier deducts a monthly charge for the pure insurance protection it is providing. The charge is computed by multiplying a rate per thousand dollars of net amount at risk — the death benefit less the accumulation value — by the number of thousands at risk. Two things follow that most policyholders never internalize.
First, the rate rises with attained age, and it accelerates. The per-thousand rate at 82 is a multiple of the rate at 68. Second, as the accumulation value falls, the net amount at risk rises, so the charge grows even if the rate held still. Those two forces reinforce each other, which is why a universal life policy that looked stable for twenty years can fail in five.
The contract contains two tables: a current rate scale the carrier is charging today, and a guaranteed maximum scale the carrier may not exceed. The gap between them is the carrier’s discretion, and it is often enormous. A policy that persists to age 95 on current charges may fail at 81 on guaranteed maximum charges. Our page on how cost of insurance works and our overview of rising universal life costs explain how to read both columns.
On a survivorship contract the mechanics have an extra wrinkle: the charge is based on joint mortality while both insureds are living, and many contracts change the charge basis after the first death, at which point the policy is being charged for a single life. Ask the carrier specifically how your contract’s charges are computed before and after a first death, because the answer changes the projected premium requirement substantially.
What the Public Litigation Record Shows — and What It Does Not
Cost-of-insurance charging at Kansas City Life has been tested in federal court. In Meek v. Kansas City Life Insurance Company, a policyholder alleged the company built profit and expense components into the cost-of-insurance charge that the policy language did not authorize, reducing accumulation values. The district court certified a class of roughly 6,000 policyholders who owned specified Kansas City Life policies while domiciled in Kansas and incurred charges between June 18, 2014 and February 28, 2021. The court granted partial summary judgment for the plaintiff on the breach of contract claim, interpreting the policy against the insurer; a separate conversion claim was dismissed. A jury awarded more than $5 million, which was reduced to $908,075 on statute of limitations grounds. On January 10, 2025 the United States Court of Appeals for the Eighth Circuit issued decisions in the consolidated appeals (Nos. 23-3334 and 23-3354), affirming class certification and agreeing that cost of insurance should not include profit and expense loads.
Be precise about what that means for you. It establishes that a court read specific Kansas City Life policy language to limit what may be loaded into the cost-of-insurance charge, for a defined class in a defined period. It does not establish that your policy is in that class, that any payment is owed to you, or the current procedural posture of the case. Do not assume a recovery, and do not let anyone tell you that a lawsuit makes your policy more valuable in the secondary market — buyers price the contract’s actual future charges, not its litigation history. If you think you may fall within a certified class, the class administrator and your own attorney are the right sources; our page on cost-of-insurance litigation generally explains how these cases work.
The practical takeaway is narrower and more useful: request your charge history in writing and compare it to the guaranteed maximum table in your contract. That comparison is worth more to your decision than any headline.
| What to check on a Kansas City Life survivorship contract | Where to find it | Why it decides the outcome |
|---|---|---|
| Number of insureds and policy numbers | Schedule page | Two policy numbers means two single-life policies, valued separately and usually higher |
| Current vs guaranteed maximum COI table | Policy contract, rate pages | The gap is the carrier’s discretion over whether your policy survives |
| Projected lapse year, guaranteed assumptions | In-force illustration, guaranteed column | Buyers price off the pessimistic column, not the current one |
| Charge basis after a first death | Written statement from the carrier | Determines the premium a buyer must project after one insured dies |
| Owner of record | Declarations page | If a trust owns it, only the trustee can act |
| Issue date | Declarations page | Inside two years, the contract is contestable and unsaleable |
Why Second-to-Die Contracts Price Lower
A buyer purchasing a policy in the secondary market is acquiring a future death benefit and agreeing to pay premiums until it arrives. Everything turns on how tightly the arrival date can be estimated.
Survivorship contracts widen that estimate in three ways. Both insureds must be underwritten independently, so a single case can require four life expectancy reports rather than two, at real cost before anyone knows a deal exists. Joint-and-last-survivor mortality runs materially longer than either individual expectancy, because the relevant event is the later of two deaths — two people each with a twelve-year expectancy can produce a joint expectancy in the high teens. And fewer providers underwrite survivorship at all, so the auction is thinner and clearing prices are lower even on identical fundamentals.
Add the cost-of-insurance uncertainty described above and the buyer’s projected outlay becomes wide rather than tight. Buyers respond by pricing the unfavorable end of the range. A survivorship universal life contract will generally draw a lower offer than a single-life guaranteed universal life contract of the same face amount on either of the same insureds. That is arithmetic, not negotiation.
When the Policy Has Genuinely Outlived Its Purpose
Survivorship coverage was sold to solve a problem that arrives at the second death — usually an estate tax bill, a liquidity shortfall for illiquid assets like farmland or a closely held business, or an equalization payment among children. Four events end that purpose.
The estate tax exposure disappeared. The federal estate and gift tax exclusion stands at $15 million per person for 2026 following the 2025 federal tax legislation, with portability effectively doubling it for a married couple against a 40% top rate. Policies bought in the 1990s against a $600,000 exemption are frequently now insuring a liability that no longer exists. Check the state layer too — several states impose their own estate taxes at far lower thresholds, and Missouri is not among them. See what an exemption change means for an existing policy.
The trust is no longer wanted. An irrevocable life insurance trust that exists only to hold a policy nobody needs is an annual administrative burden with no offsetting benefit.
One insured has died. The contract now functions as a single-life policy on the survivor, and both its valuation and its usefulness change at once. See what changes after the first death.
The business reason ended. Buy-sell agreements funded with survivorship coverage lose their purpose when the business is sold or the agreement is unwound.
If a Trust Owns It, the Trustee Decides
Most survivorship policies were issued to an irrevocable life insurance trust so the proceeds would fall outside both estates. If that describes yours, the insureds cannot sell the policy. The trustee can, subject to the trust instrument and applicable fiduciary law, and the trustee’s file will be examined.
The trustee should confirm authority to dispose of trust assets, document why continued premium payments no longer serve the beneficiaries — which practically means obtaining an in-force illustration and a written valuation — notify beneficiaries and often collect written consents, and then sign the transaction documents personally as trustee. Our guide to selling an ILIT-owned policy walks through the sequence.
The recurring soft spot is Crummey notices. Trusts funded with annual exclusion gifts were supposed to send beneficiaries written withdrawal notices each year, and in a great many trusts those notices were never sent or never retained. Missing notices do not prevent a sale, but they surface in diligence and they are a gift tax question for the client’s own attorney and accountant, not for a settlement company.
The Document Request That Answers Your Question
Write to Kansas City Life policyholder service and ask for four things in one letter, signed by the policy owner: an in-force illustration projecting values year by year at current charges and current crediting; the same projection at guaranteed maximum cost-of-insurance rates and the guaranteed minimum crediting rate; the annual premium required to carry the policy to the maturity date; and a statement of how cost-of-insurance charges are computed before and after a first death under this contract form.
Two things to know about the request. An annual statement is not a substitute — it reports the past and never shows the guaranteed column. And turnaround on legacy blocks commonly runs three to six weeks, so start before any deadline you are working against. Read what an in-force illustration shows so the request comes back complete the first time.
Also confirm the issue date. Life policies are generally contestable for two years from issue, and providers will not purchase inside that window. If the contract is under two years old, the answer is to wait.
With the illustration in hand, a free, no-obligation review can tell you what the secondary market would pay against what the policy costs to keep, and will tell you directly when keeping, reducing, or converting the policy is the better answer. Send the policy cover page or call (305) 209-7183. Pine Lake Life Solutions provides educational information only and does not provide legal, tax, or investment advice; litigation eligibility, trustee duties and estate tax exposure are questions for your own attorney and accountant.
Frequently Asked Questions
Does the Kansas City Life class action mean my policy is worth more?
No. Buyers price a policy on its projected future charges and death benefit, not on litigation history. The Meek case established that a court read specific policy language to limit what may be loaded into cost of insurance for a defined Kansas class and period. Whether you fall within any class is a question for the class administrator and your own attorney.
What actually happened in Meek v. Kansas City Life?
A policyholder alleged profit and expense loads were improperly included in cost-of-insurance charges. A class of roughly 6,000 Kansas policyholders was certified, partial summary judgment was entered on the contract claim, and a jury award was reduced to $908,075 on limitations grounds. The Eighth Circuit issued decisions on January 10, 2025 affirming certification and the policy reading.
Why does cost of insurance rise so fast on an old policy?
Two forces compound. The rate per thousand dollars of net amount at risk climbs with attained age and accelerates after the mid-seventies. At the same time, as accumulation value falls the net amount at risk grows, so the same rate is applied to a larger base. A policy stable for twenty years can fail within five.
How does a first death change the policy?
The contract begins functioning economically as a single-life policy on the surviving insured. Valuation improves because only one life expectancy must be underwritten and the projected horizon shortens. Many contracts also change the cost-of-insurance basis at that point. Notify the carrier of the first death regardless of what you decide to do.
Why do survivorship policies get lower offers than single-life ones?
Two insureds must be underwritten, joint-and-last-survivor mortality runs materially longer than either individual expectancy, and fewer providers bid on survivorship cases. More years of premiums, heavier discounting, and a thinner auction all push the same direction. Expect a lower price than a single-life contract of equal face amount.
What exactly should I ask Kansas City Life for?
One signed letter requesting an in-force illustration at current assumptions, the same illustration at guaranteed maximum charges and guaranteed minimum crediting, the premium required to carry the policy to maturity, and a written statement of how charges are computed before and after a first death. Allow three to six weeks on a legacy block.
Our ILIT owns the policy. Can my spouse and I sell it?
No. The trustee holds title and must act, with authority under the trust instrument and consistent with fiduciary duty. The trustee should obtain a valuation and an in-force illustration, notify beneficiaries, often collect written consents, and sign as trustee. Expect the trust file, including Crummey notice history, to be reviewed.
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Related Reading
- Cost Of Insurance Increase Lawsuit
- What Is Cost Of Insurance
- Universal Life Cost Increases
- Can I Sell A Survivorship Life Policy
- Survivorship Policy First Death
- Sell Ilit Trust Owned Policy
- Estate Tax Exemption Change Policy
- What Is An In Force Illustration
- Sell My Kansas City Life Universal Life Policy
Pine Lake Life Solutions does not purchase life insurance policies and does not provide legal, tax, or investment advice. Information provided is for educational purposes only. Eligibility for any option, including life settlements, is not guaranteed and depends on individual circumstances, policy terms, underwriting, and market conditions. Consult independent legal, tax, or financial professionals before making decisions regarding a life insurance policy.