Variable universal life puts the investment risk on the policyholder. Premium net of charges goes into subaccounts that function like mutual funds, and the account value rises and falls with those subaccounts. There is no floor. In a bad market the account value can drop while the monthly cost-of-insurance and expense charges continue to be deducted on schedule, which is why variable universal life fails faster than almost any other permanent policy type when things go wrong.
Ohio National sold a great deal of variable business, and owners of those contracts in 2026 face an additional layer of confusion: the carrier has been renamed, its parent company changed hands in a demutualization, and many of the advisors who once serviced these policies were cut loose in a distribution dispute that generated years of litigation. This page explains what to check, which documents matter, and how a secondary market buyer would evaluate the contract. Pine Lake Life Solutions provides education and a free policy review. We do not purchase policies, we are not affiliated with Ohio National, AuguStar, or Constellation Insurance, and nothing here is legal, tax, or investment advice.
In This Article
- A Variable Policy Is a Security, and That Changes the Paperwork
- The Lapse Path: a Down Market Plus Rising Charges
- Why Your Servicing Advisor May Have Disappeared
- Where Variable Universal Life Sits in the Lineup Today
- Documents to Assemble Before Any Valuation
- How a Buyer Prices a Variable Policy
- Making the Decision
- Frequently Asked Questions
A Variable Policy Is a Security, and That Changes the Paperwork
Variable universal life is regulated as both insurance and a security. The subaccounts are registered investment options, the contract is sold with a prospectus, and the underlying funds file disclosure documents with the Securities and Exchange Commission. Ohio National’s variable products were supported by a registered underlying fund complex whose filings are publicly available through the SEC’s EDGAR system.
For an owner considering an exit, that matters in two ways. First, the disclosure documents give the actual charge structure, usually deeper than the annual statement summary: mortality and expense risk charges, administrative charges, fund-level expenses, and rider charges all stack. Second, a buyer will want to see them, because those charges determine the true cost of keeping the policy alive.
Ask for the current prospectus and the most recent statement showing subaccount allocations, unit values, and a full year of deductions. A statement showing only one account value figure is not enough.
The Lapse Path: a Down Market Plus Rising Charges
The failure pattern is consistent. In a year when the subaccounts lose value, the account value falls while charges are still deducted. The cost of insurance is applied to the net amount at risk, the death benefit minus the account value, so as the account value falls the charge rises. The policy loses ground on two fronts at once.
Recovery requires either a strong market or additional premium, and older insureds rarely have the time horizon for the first. Many contracts written in the 1990s and early 2000s were funded assuming sustained double-digit returns, and have run a deficit for years without their owners realizing it, because a statement reports a number rather than a trajectory.
The trajectory is what you need. Request an in-force illustration at current charges under three assumptions: current premium continued, no further premium, and a conservative or guaranteed-maximum-charge scenario. The projected lapse year in each version is the fact that should drive every subsequent decision.
Why Your Servicing Advisor May Have Disappeared
In September 2018, Ohio National announced an exit from most of the annuity market and notified brokerage firms that it was terminating selling agreements and ceasing payment of trail compensation to brokers who had sold variable annuities with a guaranteed minimum income benefit rider. Ohio National and its subsidiaries had sold more than $10 billion of new variable annuities between 2012 and 2018, and the decision triggered at least ten federal lawsuits from broker-dealers and advisors. A federal appeals court later found no breach of contract in one line of those cases.
That dispute concerned variable annuities rather than life insurance, but the practical fallout reached variable life owners too. Advisors who severed their relationship with the carrier often stopped monitoring every contract they had written there. A policy that needed a funding adjustment in 2020 may have gone five years without anyone reviewing it.
If you have not heard from an agent in years, do not assume the policy is fine. Assume nobody has looked at it, and get the illustration yourself.
| Document | What it reveals | Source |
|---|---|---|
| Full policy contract with riders | Guarantees, assignment terms, rider premium tests | Carrier or your own file |
| Latest statement with subaccount detail | Allocations, unit values, annual charges deducted | AuguStar policy service |
| Current prospectus | Full charge structure and fund-level expenses | Carrier or SEC EDGAR filings |
| In-force illustrations, three scenarios | Projected lapse year under each funding level | AuguStar, 800-366-6654 |
| Net cash surrender value in writing | The floor any offer must clear | AuguStar policy service |
Where Variable Universal Life Sits in the Lineup Today
The corporate picture changed twice in eighteen months. Ohio National Mutual Holdings completed a sponsored demutualization on March 31, 2022, converting to a stock company under Constellation Insurance, which is backed by Ontario Teachers’ Pension Plan and CDPQ. Effective October 2, 2023, The Ohio National Life Insurance Company was renamed AuguStar Life Insurance Company and Ohio National Life Assurance Corporation became AuguStar Life Assurance Corporation.
When Constellation announced the repositioning on July 17, 2023, it described the AuguStar Life product lineup as indexed universal life, indexed whole life, term, and bank-owned life insurance, distributed through direct agents and independent marketing organizations. Variable universal life was not among the products named in that announcement. In-force contracts continue to be serviced regardless, but a product line that is not being actively sold tends to receive less attention, and owners should be correspondingly more proactive.
A.M. Best affirmed a Financial Strength Rating of A (Excellent) and a Long-Term Issuer Credit Rating of a+ for AuguStar Life Insurance Company and AuguStar Life Assurance Corporation on November 13, 2025, with a stable outlook. Confirm the status of your own contract directly with the carrier at 800-366-6654.
Documents to Assemble Before Any Valuation
Variable policies require more documentation than fixed ones, and gathering it early shortens every later step. You want the full policy contract including all riders, the most recent annual and quarterly statements showing subaccount allocations and unit values, the current prospectus, a written statement of the net cash surrender value after surrender charges and any loan, and the in-force illustrations described above.
Also confirm whether any living benefit or no-lapse rider is attached, and whether it is still in force. Riders carry their own premium tests, and an owner who reduced funding years ago may have forfeited a guarantee without notice.
AuguStar directs life and disability income service to 800-366-6654, Monday through Friday from 8:30 a.m. to 5 p.m. Eastern, with mail to P.O. Box 237, Cincinnati, OH 45201-0237 and servicing forms accessible after logging in at augustarfinancial.com. Request everything in writing.
How a Buyer Prices a Variable Policy
Buyers convert the policy into a cash-flow model: premium out until the death benefit comes in, discounted to present value. The insured’s age and current medical records set the expected holding period, which is the largest single driver. The required premium is the second driver, and here the remaining account value helps, because a buyer that inherits a funded account has to contribute less from its own pocket.
Subaccount allocation matters less than owners expect. A buyer typically has no interest in market exposure and will often move the account into the most conservative option available, since its return comes from the death benefit rather than investment performance.
Face amount determines whether the deal is large enough to attract competing bids after transaction costs, and carrier strength closes out the list. No one can guarantee that a policy will qualify for an offer or produce a particular amount, and any party that says otherwise before reviewing the file is not giving you an assessment.
Making the Decision
Line up four numbers: the projected lapse year with no further premium, the premium required to carry the policy to life expectancy, the net cash surrender value today, and any offer. If the death benefit is still needed by a spouse, a business, or a dependent, the work is to fix the funding rather than exit. If the original purpose has passed, the comparison becomes purely economic, and lapsing for nothing is the one outcome that is almost never optimal when alternatives exist.
Pine Lake Life Solutions offers a free, no-obligation policy review and does not purchase policies. We are not affiliated with, endorsed by, or connected to Ohio National, AuguStar, or Constellation Insurance, and we cannot guarantee eligibility or value. Confirm tax treatment with your own CPA or tax attorney before acting.
Frequently Asked Questions
Does Ohio National still sell variable universal life?
When Constellation announced the rebrand on July 17, 2023, it described AuguStar Life’s lineup as indexed universal life, indexed whole life, term, and bank-owned life insurance. Variable universal life was not among the products named. In-force contracts continue to be serviced by AuguStar Life Insurance Company. Confirm the current status of your specific contract with the carrier.
Why did my variable universal life policy lose value in a year I paid premiums?
Subaccount losses reduce the account value while mortality, expense, and administrative charges are still deducted. Because the cost of insurance is applied to the death benefit minus the account value, a falling account value increases the monthly charge. The two effects compound, which is why variable contracts can deteriorate quickly.
What happened to the advisor who sold me this policy?
In September 2018 Ohio National exited most of the annuity market and terminated selling agreements and trail commissions on variable annuities carrying a guaranteed minimum income benefit rider, prompting at least ten federal lawsuits from broker-dealers. Many advisors ended their relationship with the carrier. Do not assume anyone has been monitoring your policy since then.
Do buyers care how my subaccounts are invested?
Less than owners expect. A buyer’s return comes from the death benefit, not from market performance, so it generally prefers predictability and will often move the account value into a conservative option after purchase. What drives valuation is the insured’s age and health, the premium required to keep the contract in force, and the face amount.
Is Pine Lake connected to AuguStar or Constellation Insurance?
No. Pine Lake Life Solutions is independent, does not purchase policies, and is not affiliated with or endorsed by Ohio National, AuguStar, or Constellation Insurance. We provide education and a free, no-obligation policy review so you can see your projected lapse year, surrender value, and options in one place.
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Related Reading
- Sell My Ohio National Universal Life Policy
- Sell My Ohio National Whole Life Policy
- Sell My Ohio National Indexed Universal Policy
- How To Read In Force Illustration
- How Long Policy Survive Without Premiums
- Life Settlement Process Step By Step
- How To Find Licensed Life Settlement Broker
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.