NEW YORK (CNNfn) -- Think you've been paying too much for life insurance? You may be right -- particularly if you are a Prudential policyholder.
A task force of state regulators say millions of people who bought life insurance from Prudential may have been overcharged and are entitled to some compensation.
Prudential, the nation's largest insurance company, was fined more than $35 million dollars for widespread abuses in dealing with 10.7 million policies sold between 1982 and last year.
The company has agreed to provide full restitution to customers who were victimized. Prudential will soon begin informing customers by mail about their rights. Recovery could amount to as much as $1 billion nationwide.
"I recommend that all the policy holders take a look at the offer that is about to be made by The Prudential. They're going to send out a communication explaining, in detail, the several aspects of this offer and the options that would be available to each of the policy holders," said Edward J. Muhl, the Superintendent of Insurance for the state of New York.
Elizabeth Randall, New Jersey's insurance commissioner, advised, "For those consumers who indeed have been wronged, the range of coverage can go from continued coverage with no additional premiums due, to a partial refund of premiums, or in the most egregious cases, to a cancellation of the sale and a full refund of premiums with interest."
Prudential, Metropolitan Life and others, have all been found to have taken advantage of customers.
According to Mary Griffin, insurance counsel with Consumers Union, "There's a real strong incentive for agents to sell policies again and again to consumers when in fact usually the consumer loses out when they replace the policy."
State regulators and consumer advocates counsel buyers to read the fine print and be skeptical about commission-hungry agents. Experts warn not to keep converting your policies. They gain value only as they age--as long as you keep the premiums current.