Universal life is the policy type where cost of insurance charges decide everything, and Kansas City Life is one of the few carriers where a federal appeals court has weighed in on exactly how those charges may be calculated. If you own a Kansas City Life universal life contract and the premium notices have started climbing, this page is about the two documents and one court decision that should shape your next step.
Kansas City Life Insurance Company was founded in Kansas City, Missouri in 1895 as Bankers Life Association and adopted its current name in 1900. It sells term, whole life, universal life, indexed universal life and variable universal life coverage. Pine Lake Life Solutions is not affiliated with or endorsed by Kansas City Life and does not purchase policies; what follows is educational information only.
In This Article
- The Cost of Insurance Charge Is the Whole Story
- What the Eighth Circuit Decided in Meek v. Kansas City Life
- The $45 Million Class Action Settlement and Where It Stands
- Why AM Best Moved the Outlook to Negative in December 2025
- Reading Your Annual Statement Line by Line
- Ordering the In-Force Illustration
- Alternatives Before Any Sale, and How Ownership Changes
- Frequently Asked Questions
The Cost of Insurance Charge Is the Whole Story
A universal life contract is an account. Premiums and credited interest go in; monthly deductions come out. The largest of those deductions is the cost of insurance, a per-thousand charge that rises as the insured ages. Kansas City Life describes interest on the cash value in a universal life policy as credited each month at a current rate that will never fall below the minimum guaranteed in the contract.
Read that carefully, because the guarantee runs one way. The floor protects the interest credited to the account. Nothing in it limits the charges deducted from that same account. A contract earning exactly its guaranteed minimum can still drain, and at advanced ages it usually does unless it was funded generously. That is why a universal life owner in their late seventies can receive a demand for a premium many times larger than anything they have paid before, on a policy they believed was permanent.
What the Eighth Circuit Decided in Meek v. Kansas City Life
Christopher Meek bought a Kansas City Life universal life policy and alleged the company had improperly folded profits and expenses into the cost of insurance charge, something the policy language did not authorize, which lowered his account value. He sued in federal court in Missouri for breach of contract and conversion, and the district court certified a class of roughly 6,000 Kansas policyholders.
The district court granted partial summary judgment for Meek on the breach of contract claim, interpreting the policy against the insurer and concluding that the cost of insurance should not include profits and expenses. A jury awarded more than $5 million in damages, reduced to $908,075 because of the statute of limitations. On January 10, 2025 the United States Court of Appeals for the Eighth Circuit affirmed the judgment, including class certification, the application of Kansas law, the partial summary judgment and the damages award.
Nothing in that outcome tells you what your own contract permits. It does tell you that the composition of the cost of insurance charge is a question worth asking, in writing.
The $45 Million Class Action Settlement and Where It Stands
The Meek judgment was not the end of Kansas City Life’s exposure on this issue, and the company’s own financial disclosures are the clearest public record of what followed. In its second quarter 2025 results the company reported establishing a legal settlement accrual of $35.5 million, net of tax, related to a potential settlement of class action lawsuits. That charge produced a net loss of $28.1 million for the quarter against net income of $4.7 million a year earlier; without it, the company stated quarterly net income would have been $7.5 million. Its full-year 2025 release restates the figure at $35.6 million net of tax and notes a separate $16.7 million legal accrual, net of tax, established in the fourth quarter of 2024 related to class action lawsuits.
An accrual is a reserve for an expected cost. The underlying settlement has since been described publicly in more concrete terms: Kansas City Life announced an agreement intended to resolve cost-of-insurance claims on certain universal life and variable universal life policies for $45 million, covering approximately 88,000 policyholders and, if approved, ending five pending class actions. The court granted preliminary approval on July 14, 2025 and set a final approval hearing for December 12, 2025. Reporting on the agreement indicates settlement checks would be issued to eligible class members within 30 days after the settlement becomes final.
Whether final approval was granted, and whether any distribution has occurred, could not be confirmed as of July 2026. Do not assume the matter is either concluded or still open based on this page. Note also that the separate Meek Kansas class judgment followed its own track: the settlement administrator’s site records that checks were mailed to Kansas class members who had not excluded themselves on September 10, 2025.
Pine Lake has no connection to this litigation, cannot advise on it, and cannot determine whether you fall within any class. Confirm your own class membership, the current approval status, and any deadline with the court-appointed settlement administrator or your own attorney.
| Document | Where to get it | What it tells you |
|---|---|---|
| Annual statements, last 3 years | Kansas City Life policy service | Trend in cost of insurance and account value |
| In-force illustration at current charges | Written request to the carrier | Premium needed to reach maturity |
| In-force illustration to age 90 or 95 | Same request | Premium for a defined horizon |
| Zero-premium in-force illustration | Same request | Date coverage ends with no further premium |
| Change of ownership form | Kansas City Life policy service | The carrier’s assignment requirements |
Why AM Best Moved the Outlook to Negative in December 2025
On December 4, 2025 AM Best affirmed Kansas City Life’s financial strength rating of A- (Excellent) and long-term issuer credit rating of a- (Excellent), but revised the outlooks to negative from stable. AM Best pointed directly to the group’s pending litigation exposures associated with universal life cost-of-insurance policyowner charges, and to whether the company’s risk mitigation strategies would relieve pressure on its capital growth plan and improve risk-adjusted capitalization. The same action downgraded credit ratings of subsidiary Grange Life Insurance Company and moved the issuer credit rating outlook of Old American Insurance Company to negative.
An affirmed A- rating is still an Excellent assessment. The negative outlook is a signal about direction, not a statement that anything has failed. For a universal life owner deciding whether to fund a contract for another twenty years, it is context worth having. Verify the current rating with AM Best rather than relying on any secondhand summary.
Reading Your Annual Statement Line by Line
The annual statement is the record of what has already happened, and it holds the numbers a review depends on. Work through it in this order.
- Account value at the beginning and end of the year. A decline in a year you paid premiums means deductions exceeded contributions plus interest.
- Total cost of insurance charged for the year. Compare it to the same line three and five years back to see the slope.
- Credited interest rate. Check whether it is above or at the contract’s guaranteed minimum.
- Cash surrender value versus account value. Any gap is a remaining surrender charge.
- Loans outstanding and accrued loan interest. Loan interest compounds against the same account the charges draw from.
If a statement is missing, request copies for the past three years. The trend across several statements is more informative than any single year in isolation.
Ordering the In-Force Illustration
The statement shows the past; the in-force illustration projects the future, and no serious decision should be made without one. Request it in writing from Kansas City Life at 800-821-6164 or P.O. Box 219139, Kansas City, MO 64121-9139, and specify that you want it run at current charges and the current crediting rate rather than at the original assumptions.
Ask for three versions in the same request: the premium required to carry the policy to maturity, the premium required to carry it to a stated age such as 90 or 95, and how long the policy remains in force if you pay nothing further starting today. That last figure converts a vague concern into a date, and it is usually the number that changes how owners think about the decision.
Illustrations take time to produce. A policy nearing lapse does not, so order it before you begin comparing anything.
Alternatives Before Any Sale, and How Ownership Changes
Several fixes cost far less than a sale and should be priced first. Reducing the face amount lowers the monthly cost of insurance directly. Dropping riders you no longer need has the same effect. Repaying an outstanding loan stops one drain immediately. Some owners find a premium relief or hardship arrangement is available simply by asking.
If a life settlement is ultimately the path, it concludes with an absolute assignment of the policy to the buyer, which transfers ownership rights and control over beneficiary designations. Ask Kansas City Life for its current change of ownership form and the exact signature, witness and notarization requirements before signing anything. Carrier processing times vary and are outside anyone else’s control.
Pine Lake Life Solutions offers a free, no-obligation policy review to help you interpret the statement and the illustration. Pine Lake does not purchase policies and is not affiliated with Kansas City Life. Nothing here is legal, tax or investment advice, and no eligibility or value can be guaranteed.
Frequently Asked Questions
What was Meek v. Kansas City Life about?
A universal life policyholder alleged that Kansas City Life improperly included profits and expenses in the cost of insurance charge deducted from his policy. A federal court in Missouri certified a class of about 6,000 Kansas policyholders, granted partial summary judgment for the plaintiff, and a jury awarded over $5 million, reduced to $908,075 on statute of limitations grounds. The Eighth Circuit affirmed on January 10, 2025.
Does the guaranteed minimum interest rate stop my policy from lapsing?
No. Kansas City Life describes universal life interest as credited monthly at a current rate that will never fall below the contract’s guaranteed minimum. That guarantee applies only to interest credited to the account value. It places no limit on the cost of insurance and other monthly deductions taken from the same account, which is what typically drains a universal life policy at advanced ages.
Should I be worried about the December 2025 AM Best outlook change?
AM Best affirmed the A- (Excellent) financial strength rating and revised the outlook to negative on December 4, 2025, citing pending universal life cost-of-insurance litigation and its effect on capital growth plans. An affirmed A- remains an Excellent assessment; a negative outlook signals direction rather than failure. Confirm the current rating with AM Best before relying on it.
What is the single most useful document to request?
An in-force illustration run at current charges and the current crediting rate, showing how long the policy stays in force if you pay nothing further. Most owners have never seen that number, and it turns an open-ended worry into a specific date. Request it in writing from Kansas City Life along with the past three annual statements.
Kansas City Life recorded a settlement accrual. Am I part of the class?
Pine Lake cannot tell you that, and neither can any policy review. Kansas City Life reported a legal settlement accrual of $35.5 million, net of tax, in its second quarter 2025 results relating to a potential settlement of class action lawsuits, and had announced no court approval or payment through July 2026. Class membership, deadlines and any payment all depend on definitions set by the court, so confirm yours with the court-appointed settlement administrator or your own attorney.
Will Pine Lake purchase my universal life policy?
No. Pine Lake Life Solutions does not buy life insurance policies of any kind and has no affiliation with, and no endorsement from, Kansas City Life. Pine Lake offers a free, no-obligation review to help you understand what your illustration shows and what options exist. This is not legal, tax or investment advice, and no outcome is guaranteed.
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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.