Universal life is the policy type most frequently evaluated in the secondary market, and the reason is structural rather than promotional. The premium is flexible, so a buyer taking over a contract can fund it at the minimum needed to keep it alive instead of at the level the original owner selected. That flexibility is what makes the economics work.
It is also what makes universal life dangerous to leave unattended. The monthly cost of insurance rises with the insured’s attained age, and if crediting rates fall short of what the original illustration assumed, the account value erodes until the contract cannot pay its own charges. This page explains how to read a Security Mutual universal life contract before that point arrives. Pine Lake Life Solutions is an independent education and policy-review resource, not affiliated with or endorsed by Security Mutual Life Insurance Company of New York.
In This Article
- The Contract Still Belongs to the Company That Issued It
- What Is Actually Happening Inside the Policy
- Order the In-Force Illustration, and Order It Correctly
- Partial Surrender, Face Reduction, and the Middle Options
- Where a Life Settlement Fits
- The Assignment Paperwork if a Sale Goes Ahead
- Frequently Asked Questions
The Contract Still Belongs to the Company That Issued It
Owners of older universal life contracts often spend their first hour trying to work out who holds the policy now. With Security Mutual that step is short. The company was incorporated as a mutual assessment association on November 6, 1886, reorganized as a legal reserve mutual company on December 28, 1899, adopted its present name in 1960, and remains a policyholder-owned mutual based in Binghamton, New York. There is no demutualization, no holding-company parent, and no third-party administrator to identify before you can ask a question.
Security Mutual’s own customer-service forms list confirms that universal life contracts are among the business it services directly: the form index for policies beginning 000, 001, 002, or 00DA includes an “Application for Partial Surrender of Universal Life/Annuity” alongside the loan, assignment, and beneficiary forms.
Which number to call depends on your policy prefix. The company lists Individual Client Services at 1-800-765-6668 for policies beginning 000, 001, or 002, and 1-800-632-6567 for policies beginning 00DA, with a general line at 1-800-346-7171. Policies with other prefixes are directed to contact the Home Office for forms.
What Is Actually Happening Inside the Policy
A universal life policy is best understood as a bank account with an insurance charge attached. Premiums are credited to an account value. Interest is credited at a declared rate, subject to a contractual minimum. Each month the company deducts a cost of insurance charge based on the net amount at risk and the insured’s attained age, plus policy and administrative expense charges.
The cost of insurance rises every year. At sixty the increase is barely noticeable. At eighty-two it is not. As long as the credited interest and the premium together exceed the deductions, the account grows. When they stop doing so, the account value falls, the net amount at risk grows, the cost of insurance charge on that larger risk grows too, and the decline accelerates.
A contract sold in the late 1980s or 1990s was frequently illustrated at crediting rates that have not been available for a long time. That gap, not misconduct, explains most underfunded universal life contracts sitting in filing cabinets today.
Order the In-Force Illustration, and Order It Correctly
An in-force illustration is a company-produced projection of how the policy behaves under stated assumptions. It is the single document that determines whether a universal life policy is healthy, and it is free to request.
Ask for it at current charges and the current crediting rate, not at an optimistic assumed rate. Request three scenarios in the same package. One: continue the premium currently being paid, and show the year the policy lapses, if it does. Two: the minimum annual premium required to carry the policy to age 100 or to maturity. Three: pay nothing further from today, and show the projected lapse date.
Scenario three is the deadline. It tells you how much time you have to decide and whether the decision is urgent or can wait a year. Note the date the illustration was run, because providers generally want a recent one, and pair it with a verification of coverage confirming face amount, loans, and in-force status.
| Illustration scenario to request | Question it answers |
|---|---|
| Current premium continued, current charges | Does the policy hold, and until what year? |
| Minimum premium to age 100 | What would it truly cost to keep this policy? |
| No further premium paid | What is my deadline before lapse? |
| Reduced face amount | Can a smaller policy be sustained affordably? |
| Verification of coverage | Face amount, loans, in-force status, owner of record |
Partial Surrender, Face Reduction, and the Middle Options
Universal life is more adjustable than whole life, and the middle options are frequently better than the extremes. Reducing the face amount lowers the net amount at risk and therefore the monthly cost of insurance, which can bring an ailing policy back into balance without abandoning coverage entirely. Not every contract permits it without underwriting, so ask.
A partial surrender withdraws part of the account value while keeping the contract in force. Security Mutual publishes a specific form for this on its individual customer service forms page. Understand before you file it that a partial surrender reduces both the account value and, on most designs, the death benefit, and it can accelerate a lapse rather than prevent one.
A policy loan is a third route. It preserves the death benefit but accrues interest and creates a lien that grows if unpaid, and on a thinly funded universal life contract loan interest can be the thing that finally tips it into lapse. Model each of these with the company before choosing.
Where a Life Settlement Fits
A life settlement is the sale of an in-force policy to a licensed institutional buyer who takes over premiums and receives the death benefit. Universal life fits that structure better than any other type because of premium flexibility, which is why it is the most commonly evaluated policy type.
The pattern the market looks for is a senior insured, often around age sixty-five or older, or a younger insured whose health has materially declined since issue, together with a death benefit large enough to justify the transaction and a policy no longer serving its original purpose. Those are general patterns, not rules. Every offer is a case-by-case underwriting decision made by licensed providers using medical records and actuarial life expectancy reports.
No guarantee of eligibility or value can be made in advance, by Pine Lake or by anyone else. Pine Lake does not purchase policies. The only step offered is a free, no-obligation review of the paperwork.
The Assignment Paperwork if a Sale Goes Ahead
Ownership transfers are recorded by the company. Security Mutual publishes an Absolute Assignment of Life Insurance Policy, identified on its site as the change of ownership form, for policies beginning 000, 001, 002, or 00DA. A separate form is required for each policy; all current and all new owners must sign; and the form does not change the beneficiary designation, so a change of beneficiary form is normally filed alongside it. A trust certification giving the trust name, trust date, and trustees is required if a trust will own the policy.
The company states that “an original copy must be received by our Home Office unless it states otherwise on the form,” with the Home Office at 100 Court Street, PO Box 1625, Binghamton, NY 13902-1625. Read any offer package in full, keep copies of everything, and do not sign a transfer document until the terms are settled in writing.
Frequently Asked Questions
Does Security Mutual still service universal life policies?
Yes. The company’s individual customer service forms index for policies beginning 000, 001, 002, or 00DA includes an Application for Partial Surrender of Universal Life/Annuity, which confirms universal life contracts are administered directly by the company rather than by an outside servicer.
Why is my universal life premium suddenly not enough?
Cost of insurance charges rise with the insured’s attained age, and many older contracts were illustrated at crediting rates that no longer apply. When credited interest plus premium stops covering the monthly deductions, the account value falls and the shortfall compounds. An in-force illustration at current charges shows exactly where the policy stands.
What number do I call about my Security Mutual policy?
It depends on the policy prefix. The company lists Individual Client Services at 1-800-765-6668 for policies beginning 000, 001, or 002, and 1-800-632-6567 for policies beginning 00DA. The general company line is 1-800-346-7171, and policies with other prefixes are directed to the Home Office.
Is a partial surrender a good way to solve a premium problem?
Sometimes, but it can make matters worse. A partial surrender reduces the account value and, on most designs, the death benefit, which can move a lapse date closer rather than further away. Ask the company to illustrate the policy both with and without the withdrawal before filing the form.
Will Pine Lake buy my universal life policy?
No. Pine Lake does not purchase policies and is not affiliated with Security Mutual Life Insurance Company of New York. It offers education and a free, no-obligation policy review. Any actual transaction would involve licensed life settlement providers, who make their own eligibility and pricing decisions.
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Related Reading
- Sell My Security Mutual Whole Life Policy
- Sell My Security Mutual Guaranteed Universal Policy
- Sell My Zurich American Universal Life Policy
- How To Read In Force Illustration
- How Life Settlement Value Is Calculated
- How Long Policy Survive Without Premiums
- Automatic Premium Loan Provision
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.