Whole Life Insurance Policyholders Overcharged
State Farm Life Insurance Company Targeted in Class Action Lawsuit
On June 5, 2016, Michael G. Vogt filed a class action lawsuit against State Farm Life Insurance Company. Mr. Vogt, holder of a whole life insurance policy, asserts that State Farm overcharged him for over two decades by applying unauthorized and undisclosed factors to the calculation of his policy expenses. On June 6, 2018, a jury awarded $34 million to a class of State Farm policyholders.
What is Whole Life Insurance?
There are two types of life insurance policies: term and whole.
In exchange for a fixed premium, term insurance covers a set period of time and provides a cash payout if they policyholder dies while the policy is in effect.
Whole life insurance policies generally cover the policyholder’s entire lifespan. The rates for this coverage, typically much higher than the rates for term insurance, are determined by a number of set factors, such as the insured’s aged and sex. Policies accrue monetary value through an interest-bearing account, financed by a percentage of the policyholder’s premium; the insurer may deduct disclosed fees from this account. Whole life insurance policies also have a “death benefit,” a tax-free payout to the insured’s beneficiaries. The cash value of the account builds up over time, eventually constituting the entirety of the death benefit.
Complaints against State Farm’s Whole Insurance Policy
- Applied undisclosed and unauthorized factors in determining policy rates, leading to an increase in rates
- Deducted unauthorized expenses from policy account, reducing value of account
- Breached contract by violating policy rules
Have you been overcharged by a Whole Life Insurance Company? Would you even know?
Our attorneys are investigating claims related to the billing practices and overcharges by whole life insurance companies. If you believe you or a loved one have been impacted by this unfair practice, contact the whole life insurance attorneys at Aylstock, Witkin, Kreis & Overholtz today for a free consultation. There is never a fee unless we recover for you.