universal life insurance class action lawsuit

The Thompson case is the second class action lawsuit challenging increases in the monthly charges imposed by Transamerica on universal life insurance policies. Some policyholders have filed insurance class action lawsuits against their insurance companies, alleging that the insurers are hiking universal life insurance cost in order to give larger payouts to shareholders. We've had our skepticism about the products for a long time. Agents who market life insurance as a savings vehicle, but fail to make use of blending have always ventured into territory that might one day be illegal, and this lawsuit might be the catalyst for that eventual discussion/reality.eval(ez_write_tag([[300,250],'theinsuranceproblog_com-banner-1','ezslot_4',146,'0','0'])); Ultimately, the blending discussion is one of simple suitability. It is believed that some companies, including AXA Equitable and Pacific Life, may have used misleading financial return illustrations when selling their permanent life insurance policies. State Farm Life Insurance Company and State Farm Life and Accident Assurance Company have agreed to settle a class action lawsuit alleging misleading sales practices of traditional whole life and universal life insurance policies sold in the United States dating back to 1982. If You Own a Universal Life Insurance Policy with John Hancock, You May Be Eligible for a Payment from a Class Action Settlement. At the core of this lawsuit are PacLife's PDX Indexed Universal Life Insurance policy and its extremely obtuse multiplier bonus. In February 2016, a class action lawsuit was filed against Transamerica Life Insurance Co. for raising the cost of insurance on some universal life contracts. ClassAction.org is a group of online professionals (designers, programmers and writers) with years of experience in the legal industry. An Earlier Lawsuit against Lincoln In No. So regulatory action already removed one of the key pillars of the plaintiffs' case against PacLife. Its approach to multipliers and other common IUL features can be confusing and seemingly over-complicated. Others may be representing a higher growth rate of the stock index than what most financial experts would believe to be reasonable. I can only speculate, but I'm guessing that the plaintiffs' legal team's case will hinge heavily on its ability to prove that PacLife cannot return to the capability it assumed at policy issue and that those assumptions were never going to materialize. Simple! If you purchased an Indexed Universal life insurance policy, read on for more information. Blending exists as a way to manipulate a policy's design and augment the cash value achievable in the policy. When someone purchases a life insurance policy, the insurance company may provide him or her with an “illustration” of the policy’s benefits. While not binding, this illustration serves as an “educated guess” as to what the policy will be worth in any given year. This is the first I'm aware of blending showing up in an official legal complaint against a life insurer, and it introduces something I have long wondered about the life insurance industry and the marketplace for cash value-focused life insurance sales. The in-force illustrations provided by PacLife depicted much lower values than the ones Li saw in the original illustration used by agent Xu to sell her the PacLife PDX policy.eval(ez_write_tag([[300,250],'theinsuranceproblog_com-leader-1','ezslot_6',136,'0','0'])); The dramatic change in policy values was the motivation for filing the lawsuit. Even if you don’t believe the guaranteed rates are “realistic”, the fact is they are a theoretically possible scenario, else they wouldn’t be there. Additionally, the plaintiffs allege that PacLife knowingly brought the product to market under conditions it knew it had no chance of sustaining and used extremely optimistic assumptions to illustrate values to lure in unsuspecting new policy owners. This Settlement does not affect your life insurance policy or death benefit in any way. Transamerica notified its policyholders in 2015 that it was increasing the cost of insurance on universal life insurance policies that it sold during the late 1980s and early 1990s, some by up to 38 percent. The same logic applies to whole life, too. The plaintiffs allege that PacLife designed and marketed this product specifically to skirt the spirit of Actuarial Guideline 49 (AG49). We work closely with class action and mass tort attorneys across the country and help with investigations into corporate wrongdoing. On June 10, 2016, all of the named plaintiffs filed a consolidated class action complaint in that district under the caption Gordon Feller, et al. It will also be interesting to see what happens with the agent Tiffant Xu and her insurance agency. If a lawsuit can be filed, indexed universal life insurance policyholders may be able to recover compensation for any harm they suffered in buying these policies. You can design it as 100k base policy and 900k as term in a whole life. After making two $500,000 premium payments, Li became suspect of the policy when statements she received from PacLife reported value far different from the figures she anticipated. 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