Kansas City Life Insurer Returns to Nine-Month Profit
Universal life and variable universal life policyholders see the company's 2026 results follow a $45 million 2025 settlement.
Updated on Nov. 2, 2026 in Insurance
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Kansas City Life Insurance reported net income of $19.1 million, or $1.97 per share, for the first nine months of 2026, compared with a $21.7 million net loss in the same period of 2025. The swing followed a 2025 legal settlement over cost-of-insurance charges that affected policyholders with universal life and variable universal life policies.
Why it matters
The turnaround reflects the absence of the large 2025 settlement charge rather than a broad change in the company's earnings base, and third-quarter results were weaker than a year earlier. For households holding universal life or variable universal life policies, the case shows how cost-of-insurance charges can become the subject of litigation and settlement payouts.
The company's $45 million nationwide settlement covered about 88,000 policyholders, and its $35.5 million after-tax accrual in the second quarter of 2025 drove the prior-year loss. Third-quarter 2026 insurance revenues fell 1% to $1.1 million and investment revenues fell 1% to $600,000.
The players
Kansas City Life Insurance
A Kansas City-based life insurer whose universal life and variable universal life policies are the subject of the cost-of-insurance settlement.
The details
Cost-of-insurance charges are the fees insurers deduct from permanent life insurance policy cash value to cover the cost of the death benefit, and the settlement addressed how those rates were applied to universal life and variable universal life policies. Kansas City Life Insurance agreed to the $45 million settlement in June 2025 and recorded a $35.5 million after-tax accrual in the second quarter of 2025, which produced the loss reported for the first nine months of that year. The company did not admit liability or wrongdoing. In the third quarter of 2026, operating expenses fell 3%, or $0.8 million, but lower revenue left net income at $1.7 million.
Timeline
June 2025: Company agreed to the $45 million cost-of-insurance settlement.
Second quarter 2025: Company booked the $35.5 million after-tax settlement accrual.
Third quarter 2026: Company reported $1.7 million in net income.
Money Landscape
The swing from a 2025 loss to a 2026 profit is largely a comparison effect, since the prior period absorbed the one-time settlement accrual. The third-quarter decline in revenue and net income suggests the underlying earnings trend was softer even as the year-to-date total improved.
Holders of universal life or variable universal life policies should review their annual statements for changes in cost-of-insurance charges, since those charges directly affect policy cash value. Anyone who believes they were affected by the settlement should check the status of the claims process with a qualified financial or tax professional.
The takeaway
Cost-of-insurance charges are a recurring deduction in permanent life policies, so reviewing how they are calculated each year is a sensible habit. Households with these policies may wish to discuss any questions about settlement eligibility or policy changes with a qualified financial professional.
Further reading
For background on how these policy charges work, see Insurance coverage in Kansas City.
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