Life insurance policies can last for many years, and consumers are often unaware of whether the terms of their policies are fully met or not. The complaint for this class action claims that plaintiff Ronald B. Hardy was not aware for many years that an extra interest endorsement on his policy was not being paid and unauthorized charges were being deducted as well. This class action is an attempt to remedy these situations with Transamerica Life Insurance Company, the current insurer.
Plaintiff Hardy took out his life insurance policy on September 29, 1988. Over the years, the name of the insurer has changed a number of times due to mergers and possibly other events. For years, Hardy has paid $500 a month to maintain the policy, which has a face value of $550,000.
On August 19, 1996, Hardy received a letter acknowledging that he had accepted something called the “Enhancement ’96 offer.” An endorsement was enclosed and the letter explained that it “generally provides that the cash value of your certificate will be credited with an additional one percent interest for the next eighteen years.” The enhancement was to begin being credited to his account on August 9, 1996.
The policy’s certificate says that the minimum interest rate on the account value is four percent. The complaint claims that the Enhancement Endorsement meant that the minimum would become five percent between August 9, 1996 and August 8, 2014.
However, according to the complaint, Hardy’s account was not credited with the extra 1% in interest over the eighteen-year period.
Also, the complaint alleges that Hardy has regularly been charged an “asset management fee” which is not mentioned in the certificate. The certificate allows for an administrative charge, risk charge, and monthly service charge that may be deducted from the account’s value, but it does not mention any asset management charge.
Still, the complaint claims that both the administrative charge and the asset management charge were deducted from the account value, reducing its value and hindering its performance.
Two classes have been proposed for this action.
The Enhancement Endorsement Class is all persons who were issued a Leveraged Split Dollar Life Insurance Plan Interest Enhancement Endorsement (“Enhancement ’96”) guaranteeing that Transamerica Life Insurance Company or its predecessors would credit additional interest to the cash value of the Life Insurance Certificate or policy, but who did not receive the promised interest for some or all of the term of the endorsement.
The Asset Management Fee Class is all persons who own or owned a Life Insurance Certificate or policy issued by Transamerica Life Insurance Company or its predecessors who were charged an asset management fee that was not authorized under the terms of the certificate or policy.Article Type: Lawsuit