September 10, 2015 Last Updated on April 18, 2019. The lawsuit seeks class-action status welcoming the possibility that the attorneys working for the plaintiffs can prove that PacLife's behavior in marketing a certain indexed universal life insurance policy violates the law and hurts many people across the United States. The plaintiff, who owned an "Ensemble II" Lincoln variable universal life insurance policy, filed his complaint in an Indiana state court in … Welcome to the Voya (f/k/a Aetna) COI Life Insurance Class Action Lawsuit Website If you own a universal life insurance policy issued by Aetna (now, Voya) that was subject to a cost of insurance rate increase announced in 2016, this class action may affect your rights. Is it suitable to sell someone a life insurance contract that lacks the features known to enhance cash value when you the agent know cash value accumulation is the primary goal? According to an Investment News article, the plaintiffs allege the action “constitutes a breach of obligations under the policies and has led to damages against contract holders.” An IUL class action lawsuit investigation is underway to probe into allegations that people who purchased Indexed Universal Life (IUL) insurance policies were misled into expecting unrealistic rates of return that comes after insurance companies presented used fabricated and false illustrations in marketing literature and sales material. When someone purchases a life insurance policy, the insurance company may provide him or her with an “illustration” of the policy’s benefits. A lawsuit could also help enact change in the industry – and stop insurance companies from engaging in these allegedly deceptive practices. v. Transamerica Life Insurance Company. The lawsuit also seeks a … In May 2018, Nationwide privately paid a settlement in a similar class action lawsuit over the cost of life insurance. The Its approach to multipliers and other common IUL features can be confusing and seemingly over-complicated. 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. 16-cv-60442 (S.D. A class action settlement has been preliminarily approved in Rodriguez v. Universal Property, No. Plaintiff Hong Li and her family met with agent Tiffany Xu in 2018. It will also be interesting to see what happens with the agent Tiffant Xu and her insurance agency. The same logic applies to whole life, too. Not blending in an IUL is more devastating than in whole life. The objective of this executive summary is to provide a simple, short but comprehensive overview of the sales problems and abuses associated with the Universal Life policies. Simple! It's peculiar, however, that Xu is a named defendant given the suit seeks class-action status.eval(ez_write_tag([[300,250],'theinsuranceproblog_com-large-mobile-banner-1','ezslot_7',137,'0','0'])); It will also be interesting to see what, if any, future regulation comes about from this lawsuit. This isn’t just an IUL issue. New cases and investigations, settlement deadlines, and news straight to your inbox. 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. That’s criminal! On June 5, 2018, Jeffrey Leonard (Leonard) and others filed a class action lawsuit against John Hancock Life Insurance Company of New York (John Hancock) and others relating to huge cost-of-insurance (COI) increases on certain universal life insurance policies. While many of us might look at market conditions and quickly draw such a conclusion, that case may be much more difficult to argue in a court of law. information here is for reference only. The Supreme Court of Canada (SCC) has ruled that a proposed $2.5-billion class action against insurance giant Sun Life Assurance Co. over the alleged miss-selling of certain universal life policies by predecessor Metropolitan Life Insurance Co. can go ahead. 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. Please Note: If you want to participate in this investigation, it is imperative that you reply to the law firm if they call or email you. Others may be representing a higher growth rate of the stock index than what most financial experts would believe to be reasonable. Policyholders who have been affected by universal life insurance policy premium increases have a few options moving forward. So PacLife could theoretically explain away its underperformance as variability in the market. The complaint does allege specific wrong-doing on the behalf of agent Xu. The plaintiffs allege that PacLife designed and marketed this product specifically to skirt the spirit of Actuarial Guideline 49 (AG49). The same should be done in IUL. PacLife has always taken a different approach to blending and certainly manufactured products where blending term insurance did enhance policy cash value performance. Let’s say, someone has a $1 million life insurance need. So regulatory action already removed one of the key pillars of the plaintiffs' case against PacLife. An Earlier Lawsuit against Lincoln In No. Blending for indexed universal life insurance policies normally has little long term effect on cash value accumulation and most typically results in a reduced surrender charge. The class action was filed in June 2016, in the Western District of Missouri by Michael Vogt and other individuals who owned universal life insurance policy form 94030 issued by State Farm. The Thompson case is the second class action lawsuit challenging increases in the monthly charges imposed by Transamerica on universal 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. Allow me to explain. Side note on this: the complaint does charge that PacLife materially misrepresented the conservative nature of IUL by both failing to disclose the risk of loss when an index return is zero (net loss due to insurance expense deductions) as well as the impact the multiplier has on the policy. The attorneys we work with, however, tipped us off to reports within the industry that suggest some companies may be misleading their customers when putting together their financial return illustrations. al. This Settlement does not affect your life insurance policy or death benefit in any way. If you purchased an Indexed Universal life insurance policy, read on for more information. lawsuits can be viewed here. How, you ask? If You Insured Real Property With Universal Property & Casualty Insurance Company Between September 1, 2013 and March 31, 2016, You Can Receive Relief from a Class Action Settlement. Li agreed to buy the policy and PacLife officially issued the policy effective mid-2018. The insurance industry will be watching closely in the coming months as a class-action lawsuit over an indexed universal life policy plays out in … 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. The policy in question is very new in relative terms. join a free universal life insurance class action lawsuit investigation If you qualify, an attorney will contact you to discuss the details of your potential case at no charge to you. 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. Universal life insurance policyholders are not covered by the recent Missouri class action lawsuit, but could also be unknowingly affected by these overcharges as they’re not typically detectable due to the complex ways these charges are hidden. On August 22, 2018, John Hancock answered the complaint. working with ClassAction.org are no longer investigating this matter. In October 2018, Transamerica Life Insurance Co. agreed to pay $195 million to settle a class action lawsuit accusing the company of improperly increasing the monthly cost on 70,000 universal life insurance policies. If this lawsuit is certified as a class action, retirees who meet certain criteria will be included in this class even if they don’t sign up with us. The complaint mentions policy blending by noting that: …PacLife offers agents higher commissions–up to three times higher–to steer customers into a PDX Policy with all or a substantial portion of the face amount allocated to base coverage, even the policy charges would be far less under a blended structure. Before commenting, please review our comment policy. Attorneys 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. The Plaintiffs allege that Premier Financial Group has been carrying out an unlawful pyramid scheme involving the sale of universal life insurance policies issued by National Life Group. Florida). Universal Life Class Action. You can design it as 100k base policy and 900k as term in a whole life. Lawsuits filed against insurers in recent years for their practices around universal life insurance policies highlight the risks these products can pose to unwary financial advisers and clients. 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. In order to be a class action, the court must approve it as such. 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. That said, I do have some additional thoughts on what the plaintiffs' legal team might have in their possession that could be bad news for PacLife, and potentially bad news for the insurance industry as a whole. For those seeking out whole life insurance as a retirement option, Infinite Banking® et. A list of open investigations and That's a big question many have asked for years. A lawsuit could also help enact change in the industry – and stop insurance companies from engaging in … It's a weird concept for universal life insurance (since it's effectively term insurance already). Universal life insurance policies have a guaranteed interest rate. Blending allows us to take many of the cash-building advantaged attributes universal life insurance has and give them to whole life insurance. At the core of this lawsuit are PacLife's PDX Indexed Universal Life Insurance policy and its extremely obtuse multiplier bonus. This class action lawsuit is known as Hanks v. Class Action Filed Against Transamerica Life Insurance Co. Over Massive Premium Increases In May 2016, a class action lawsuit was filed against Transamerica Life Insurance Company on behalf of a group of universal life policyholders who experienced a sudden 38% increase in monthly deductions withdrawn from their accumulation accounts. But that application usually applies to whole life insurance. If You Own a Universal Life Insurance Policy with John Hancock, You May Be Eligible for a Payment from a Class Action Settlement. Due to an extended low-interest-rate environment, companies are struggling to pay policyholders the guaranteed rate. This is an interesting lawsuit for several reasons and while I'm not surprised PacLife is at the center of an indexed universal life insurance lawsuit, I'm suspect of the strength of the plaintiffs' argument.eval(ez_write_tag([[300,250],'theinsuranceproblog_com-medrectangle-3','ezslot_2',131,'0','0'])); Not that I want to discount the plaintiffs' potential suffering, I simply feel that the evidence provided in the complaint falls short of proving wrongdoing. The class action Life Insurance Rip Off lawsuit against Transamerica is seeking reinstatement of any policy surrendered as the result of the rate increases. They get a fat commission check and leave the policy underfunded, waiting to blow up in a few years. 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. I think you are very correct in the context of an agent motivated to write more permanent life insurance per the budget/death benefit need, but the context of this discussion was blending used to maximize cash building potential of a policy. Write a 100k IUL and another 900k a 30 year term policy. Acting on a tip she received from a family member, who holds an insurance license, Li requested several in force illustrations from PacLife depicting varying scenarios premium payment scenarios to the policy moving forward; one of those scenarios included staying the course. ClassAction.org is a group of online professionals (designers, programmers and writers) with years of experience in the legal industry. 157 (posted April 20, 2016), I wrote about an earlier COI class action lawsuit against Lincoln. After the fifth annual payment, Xu claimed Li would owe no future premiums and even be able to take income from the indexed universal life insurance policy in the amount of $175,000 per year.eval(ez_write_tag([[300,250],'theinsuranceproblog_com-large-leaderboard-2','ezslot_8',135,'0','0'])); Li and her family met a second time with Xu and at that meeting, Xu presented Li with a new life insurance illustration for the same PacLife IUL policy, but with a few alterations from the original proposal that appeared to make little significant change to policy values. https://traffic.libsyn.com/secure/insuranceproblogpodcast/An_Ugly_Indexed_Universal_Life_Insurance_Lawsuit.mp3, Violation of Unfair Competition Law Business and Professions Code. 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