WASHINGTON (AP) _ Wayne Bohrer thought the $50,000 life-insurance policy he bought in 1985 was a good investment for his retirement because he would be done paying premiums this year.

But Bohrer says he discovered this year that he would have to continue paying an annual premium of $1,217.50 for at least five years because the policy had not earned enough dividends to pay for itself.

Coverage that Bohrer says cost him $9,744 will cost at least an additional $6,087.

''I had no idea my premiums were going to increase by 63 percent,'' Bohrer, a federal drug agent, told a Senate subcommittee Tuesday.

Bohrer said that he and his wife, Ruth, ''thought we were buying a policy that would require no additional payments by the time of our retirement.''

But the fine print of the Prudential Insurance Co. policy carries a disclaimer that there is no guarantee enough dividends would be earned to cover premiums after eight years.

''We are now close to retirement and the plans we carefully laid out ... have come to nothing,'' Bohrer said. ''If the policy we were sold had clearly spelled out that the payment schedule was only a sales gimmick we never would have bought it.''

Bohrer's testimony before the Senate Judiciary antitrust subcommittee illustrated what a former insurance industry executive called a tendency by agents to leave consumers confused about the difference between the guaranteed and projected values of a whole-life policy.

''The biggest problem that we face as an industry is that we may be creating false expectations in the minds of buyers of life insurance,'' said Mel G. Todd, who now runs a Dallas consulting firm.

Todd told the panel insurance companies don't deliberately try to mislead consumers but ''the competitive forces within the marketplace keep driving companies to a position where they are making more and more aggressive assumptions in their illustrations.''

Because life insurance policies outperformed their projected earnings for a half century, salesmen were lulled into believing that this trend would continue, Todd said.

Consumers aren't always told that changing economic conditions mean that the rosy projections in so-called ''policy illustrations'' are just predictions, not guarantees, Todd said.

Declining interest rates and real estate values have hurt the performance of whole-life policies, which are sold as tax-free investments as much as for death benefits.

Part of the annual premium is invested to enhance the ''cash value'' of the policy. At a certain point, policyholders can elect to redeem the policy for the cash that has accumulated over time. Or they can elect to use dividends to pay the annual premium to continue the coverage.

''People are not being told the simple truth about their life insurance,'' said Sen. Howard Metzenbaum, D-Ohio, the panel's chairman. ''This lack of disclosure is costing them a lot of money, and people are left without the coverage they need.''

Prudential spokesman Jim Longo acknowledged in a telephone interview that the company had received other complaints similar to Bohrer's.

''What went wrong was the economy,'' he said. ''I don't think any of us foresaw a few years ago that (interest) rates would fall as they did.''

As a result, ''great care is taken from the corporate side to emphasize to the agents how they represent these policies'' so that ''people understand more clearly'' that projections are not guarantees, Longo said.

Other industry organizations, such as the National Association of Life Underwriters, say they have adopted guidelines for the use of policy illustrations.

But Metzenbaum argued that still more needs to be done to regulate what consumers should be told about projections.

David Lyons, Iowa's insurance commissioner, said the National Association of Insurance Commissioners, is drafting changes in its model code that deals with the issue.