Protective Life Insurance Improper Terminations Class Action

Life insurance is more expensive for older people. Because of this, a person whose policy lapses or is terminated after many years cannot simply get another with the same terms. The complaint for this class action alleges that Protective Life Insurance Company and Empire General Life Insurance Company do not comply with “mandatory provisions of the California Insurance Code as well as California common law regulating the lapse and termination of life insurance policies.”

Among the complaint’s allegations is that Protective has refused to give certain insureds proper notices of pending lapses or terminations, has not allowed them required grace periods, and has also failed to tell policy owners that they have the right to designate someone else to receive critical information. All of these things, the complaint says, are required by the California Insurance Code.

The laws regarding termination were designed to protect policy holders, particularly senior citizens and those who are ill, so that one missed payment does not cancel a policy.

The complaint says that therefore “no lapse or termination for failure to pay a premium is effective, and the policy remains in force even if premiums are unpaid, unless and until all statutory and contractual provisions are satisfied.”

During or before 1998, Danny K. Allen bought a life insurance policy with Empire General, which has since been taken over by Protective. The beneficiary was Beverly Allen, the plaintiff in this case. Premiums were paid for roughly twenty years, through the first three quarters of 2018.

The complaint alleges that at no time between 2014 and 2018 did Protective tell Mr. Allen that he had the right to designate someone else to receive his policy notices.

Allen missed a payment in September of 2018. The complaint says, “At this time, Mr. Allen was ill, incapacitated, and for some period hospitalized.” Protective lapsed the policy in November. When Ms. Allen was told, she tried to make a payment, but it was rejected. Protective said it was not willing to reinstate the policy.

Mr. Allen died in January 2019. The complaint claims that at this time, Protective had not yet complied with the statutes, meaning that the policy was still in force.

The Class for this action is all past, present, and future owners or beneficiaries of Protective’s individual life insurance policies in force on or after January 1, 2013 and governed by the relevant sections of the California Insurance Code, where the policies underwent lapse, termination, or reinstatement without Protective first providing written notice of and an actual sixty-day grace period, a thirty-day notice of pending lapse or termination, and/or an annual notice of a right to designate at least one other person to receive notice of lapse or termination for nonpayment of premiums.

The Elder Abuse Subclass is all members of the class who were also 65 years of age or older at the time the policy lapsed or was terminated.

Article Type: Lawsuit
Topic: Insurance
Tags: Improper or Unlawful Termination or Cancellation Policy, Insurance