This class action concerns the monthly cost of insurance (COI) for group universal life or individual universal life insurance policies that are issued by Unum Life Insurance Company of America and administered by it or its agents. The complaint alleges that the cost of insurance charges for these policies is supposed to be based on future mortality expectations and therefore should have gone down in recent years as mortality rates improved.
The class for this action is all persons who own or owned a universal life insurance policy issued or administered by Unum, the terms of which provide for
- An insurance or cost of insurance charge or deduction calculated via a rate that is determined based on Unum’s expectations about future mortality experience,
- Additional but separate policy charges, deductions, or expenses,
- An investment, interest-bearing, or savings component, and
- A death benefit.
The complaint alleges that the language used in the Unum UL Policies says that monthly COI rates “will be based on” and “determined by” Unum’s expectations around future mortality.
The complaint claims, “It is well-documented that people are living longer now than they did 40 years ago (with some Covid-related exception). In other words, mortality rates have improved significantly over the past several decades and Unum’s future mortality experience has, likewise, improved in its favor[.]”
According to the complaint, Unum has admitted this, because it “has reported to its investors in annual reports and regulatory filings—documents that Unum did not provide to its policyholders and those policyholders likely never saw—over the past several years that mortality experiences were better than it expected.”
When mortality rates improve, and fewer people die over a period of time, the complaint alleges, this means that Unum will pay out fewer death benefits, so that its risks of insurance decrease and therefore its costs for providing insurance policies go down.
The complaint argues that Unum should therefore be decreasing its COI rates. However, it claims that Unum has not done this: “Despite the improvement in expected mortality, Unum increased the monthly COI charges that owners of Unum UL Policies were required to pay to keep the insurance in place at least once in the past five years.”
The policies in question also have a cash value that accumulates over time. This comes from premium payments from which charges like COI are deducted. If Unum is deducting too much for COI, the complaint argues, it “improperly drain[s] monies they have accumulated in the cash values under their policies.”
The complaint therefore accuses Unum of breach of contract and conversion.
Article Type: LawsuitTopic: Insurance
Most Recent Case Event
Unum Universal Life Policies COI Rate Increases Complaint
December 29, 2022
This class action concerns the monthly cost of insurance (COI) for group universal life or individual universal life insurance policies that are issued by Unum Life Insurance Company of America and administered by it or its agents. The complaint alleges that the cost of insurance charges for these policies is supposed to be based on future mortality expectations and therefore should have gone down in recent years as mortality rates improved.
Unum Universal Life Policies COI Rate Increases ComplaintCase Event History
Unum Universal Life Policies COI Rate Increases Complaint
December 29, 2022
This class action concerns the monthly cost of insurance (COI) for group universal life or individual universal life insurance policies that are issued by Unum Life Insurance Company of America and administered by it or its agents. The complaint alleges that the cost of insurance charges for these policies is supposed to be based on future mortality expectations and therefore should have gone down in recent years as mortality rates improved.
Unum Universal Life Policies COI Rate Increases Complaint