Variable universal life puts the policy’s account value into investment subaccounts that the owner selects. When markets cooperate, the account value can carry a rising cost of insurance for decades. When they do not, the same charges are deducted from a shrinking balance, and the contract can approach lapse far sooner than the original illustration suggested.
Zurich American Life Insurance Company holds variable life and variable annuity business under a separate account, and services it through outside administrators. Understanding which administrator holds your contract, and which documents to pull, is the practical starting point. Pine Lake Life Solutions is an independent education and policy-review resource. It is not affiliated with, endorsed by, or acting for Zurich American Life Insurance Company.
In This Article
- The Separate Account and the Name on Your Statements
- Which Administrator Holds Your Variable Contract
- The Lapse Path Specific to Variable Universal Life
- Documents to Pull Before Any Decision
- How the Secondary Market Treats Variable Contracts
- The Ownership Change and What to Watch For
- Frequently Asked Questions
The Separate Account and the Name on Your Statements
Variable contracts are supported by a segregated separate account rather than the insurer’s general account. Filings for this company record that Kemper Investors Life Insurance Company, known as KILICO, changed its name to Zurich American Life Insurance Company effective August 22, 2010, and that on November 2, 2010 the KILICO Variable Separate Account was renamed the ZALICO Variable Separate Account.
That is why a policyholder can hold statements referencing KILICO, ZALICO, Zurich American Life, and a fund family name all at once. They describe one contract. When you call, give the policy number and mention the original issuing name if it differs from the current one.
Because variable products are securities, they come with a prospectus and periodic reports in addition to the insurance documents. Those filings are public, and they are the most reliable place to confirm the separate account name, the available subaccounts, and the contract charges.
Which Administrator Holds Your Variable Contract
Zurich American Life publishes its service routing by product line. Scudder Destinations variable annuity contracts are “Administered by TPA illumifin” at 1-800-449-0523. Other variable annuity and variable life contracts are “Administered by Commonwealth &TPA Se2” at 1-800-457-9047. Fixed annuity contracts are “Administered by Protective Life Insurance Company” at 1-800-621-5001. Life insurance contracts are listed at 1-888-634-6780 and 1-877-301-5376. Hours are given as Monday through Friday, 7:30 a.m. to 5:00 p.m. Central.
Mailing addresses vary as well. The carrier lists a Scudder Destinations address at PO Box 64361, St. Paul, MN 55164-0361, or 7805 Hudson Rd, Suite 180, Woodbury, MN 55125, and the Zurich American Life address at 7045 College Boulevard, 8th Floor, Overland Park, KS 66211. New York contracts are handled through Zurich American Life Insurance Company of New York at 4 World Trade Center, 54th Floor, 150 Greenwich Street, New York, NY 10007.
Send documents only to the address the servicing team gives you for your contract. Paperwork mailed to the wrong administrator can sit for weeks.
The Lapse Path Specific to Variable Universal Life
Three forces work on the account value at once. Subaccount performance moves it up or down. Monthly cost of insurance charges rise as the insured ages. And asset-based fees, including mortality and expense charges plus the underlying fund expenses, are deducted regardless of performance.
The dangerous sequence is a market decline in the years when cost of insurance charges are climbing fastest. The account value falls, the same or larger deductions are taken from a smaller base, and recovery requires a return well above the loss just to get back to even. A policy that looked comfortably funded at age sixty can be issuing lapse warnings by seventy-five without the owner having changed anything.
Reallocating to a conservative subaccount after a decline locks in the loss. Reallocating to an aggressive one raises the chance of a second decline at exactly the wrong moment. There is no costless fix, which is why the decision deserves a real analysis rather than a reflex.
| Document | What it tells you |
|---|---|
| Latest quarterly statement | Account value, subaccount allocation, charges deducted |
| Contract and fund prospectus | Mortality and expense charge, surrender charge schedule, fund fees |
| In-force illustration, conservative rate | Projected lapse date and premium needed to avoid it |
| Verification of coverage | Face amount, in-force status, loans, owner of record |
| Form ZA-1025 | Carrier form covering owner and beneficiary changes |
Documents to Pull Before Any Decision
For a variable contract the document set is larger than for a fixed one. Start with the most recent quarterly or annual statement showing account value, subaccount allocation, and the charges deducted. Add the current prospectus for the contract and the underlying funds, which sets out the mortality and expense charge, administrative charges, surrender charge schedule, and fund expense ratios.
Then order an in-force illustration. Ask for it at a conservative assumed rate, not a hopeful one, and request three scenarios: current premium continued, the premium needed to sustain the contract to age 100, and the projected lapse date with no further premium. Also request the surrender value net of any surrender charge, since variable contracts often carry one for the first decade or more.
Finally, get a verification of coverage from the carrier confirming face amount, in-force status, loans, and owner of record. Licensed providers require it, and it also settles any confusion about who currently owns the policy.
How the Secondary Market Treats Variable Contracts
Variable universal life is reviewed in the secondary market, but it is handled with more caution than fixed universal life. Because the account value fluctuates, the buyer’s projected premium obligation is less certain, and buyers typically model conservative returns, which raises the assumed cost of carrying the policy.
Transfers of variable contracts can also involve securities-related steps that a fixed contract does not require, and some contracts restrict who may own them. None of this makes a sale impossible. It does mean the process usually takes longer and that the analysis depends heavily on the documents listed above.
As always, eligibility and value are decided by licensed life settlement providers based on the insured’s age, health, and the economics of the contract. Nobody can promise a result in advance, and Pine Lake does not purchase policies.
The Ownership Change and What to Watch For
If a contract does change hands, the carrier records it. Zurich American Life publishes form ZA-1025, the Non-Financial Change Form, described by the carrier as the form to “use when changing address, name, maturity date, beneficiaries or owners,” and form ZA-1068, a Trustee Certification, required with ZA-1025 when a trust takes ownership. Form ZA-8154 is a Collateral Assignment Form for pledging a contract against a loan, which is a different transaction entirely.
Confirm with the servicing administrator which form applies to an outright transfer of your contract and whether an original signature is required. Read the entire offer package before signing anything, keep a copy of every document you send, and be aware that surrender charges, outstanding loans, and pending fund transfers can all affect the numbers at closing.
Frequently Asked Questions
What is the ZALICO Variable Separate Account?
It is the segregated separate account supporting Zurich American Life’s variable contracts. It was named the KILICO Variable Separate Account until November 2, 2010, when it was renamed following the company’s own name change from Kemper Investors Life Insurance Company to Zurich American Life Insurance Company effective August 22, 2010.
My variable policy lost value in a market downturn. Can it still be sold?
A lower account value does not automatically disqualify a policy, and in some cases it makes selling more relevant than surrendering, because the surrender value has fallen while the death benefit has not. Whether any licensed provider will make an offer depends on the insured’s age, health, and the projected cost of carrying the contract.
Which number do I call for a Zurich variable life contract?
The carrier lists other variable annuity and variable life contracts as administered by Commonwealth and TPA Se2 at 1-800-457-9047, and Scudder Destinations contracts as administered by illumifin at 1-800-449-0523. Confirm which applies to your policy number before mailing documents anywhere.
Do I need the prospectus?
For a variable contract, yes. The prospectus is where the mortality and expense charge, administrative fees, surrender charge schedule, and underlying fund expenses are disclosed. Without it you cannot see the full cost of holding the policy, and those costs drive the keep-or-sell comparison.
Is a surrender charge still in effect on my policy?
Ask the servicing administrator for the current surrender value net of any charge, and for the date the surrender charge schedule ends. Many variable contracts carry surrender charges for ten years or more from issue, which can materially change the comparison between surrendering and other options.
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Related Reading
- Sell My Zurich American Universal Life Policy
- Sell My Zurich American Guaranteed Universal Policy
- Sell My Zurich American Term Policy
- How To Read In Force Illustration
- Cash Value Loan Vs Surrender
- How To Compare Life Settlement Offers
- Life Settlement Process Step By Step
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.