Life insurance is generally held long-term. The complaint for this class action alleges that US Financial Life Insurance Company terminated the policies of certain classes of policy holders without proper notice as required by the California Insurance Code.
The complaint points to two alleged violations. First, it says, US Financial and related entities have “systematically and purposely” not provided certain classes of policy holders with proper notices of lapse or termination. Second, it says, the company has notified policy holders of “their right to designate someone to receive critical notices and information regarding life insurance, despite being required to do so on an annual basis.”
The laws requiring these things were intended to keep policy holders from losing their insurance for just a single missed payment “or resulting from a policyholder[’s] physical or mental infirmity.”
Because California requires strict compliance with these laws, the complaint says, “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.”
In this case, plaintiff Patrick S. Bumpus bought a life insurance policy sometime around 2004. US Financial was responsible for it from January 1, 2013 on.
Bumpus’s wife, Sarah Bumpus, was in charge of paying the bills. In October 2019, her grandmother passed away. According to the complaint, “In the chaos and stress of dealing with her grandmother’s illness and eventual death, Ms. Bumpus inadvertently failed to pay the premium due on October 19, 2019.” Eventually, she realized her mistake, the complaint says, and sent US Financial a check for the full amount on November 15, 2019.
On November 19, US Financial sent a lapse notice to Bumpus, telling him that his policy had lapsed because of the missed payment. It required that he apply for reinstatement and “demonstrate evidence of insurability.” He did this in December. In February 2020, the company asked for more information, and Bumpus also provided this. However, the complaint says, “To date, [Bumpus] has not received a response to his application for reinstatement…”
According to the complaint, US Financial “did not provide a 60 day grace period, a 30 day notice, or the right to designate a third party to receive such notice to [Bumpus] prior to termination of the policy.”
The class for this action is all owners or beneficiaries of US Financial’s individual life insurance policies in force on or after January 1, 2013 and governed by Sections 10113.71 or 10113.72 of California law, where the policies underwent or will undergo lapse, termination, or reinstatement without US Financial first providing written notice of and an actual sixty-day grace period, a thirty-day notice of pending lapse and termination, or an annual notice of the right to designate at least one other person to receive notice of lapse or termination of the policy for nonpayment of the premium.
Article Type: LawsuitTopic: Insurance
Most Recent Case Event
US Financial Termination of Life Insurance Policies Complaint
May 5, 2020
Life insurance is generally held long-term. The complaint for this class action alleges that US Financial Life Insurance Company terminated the policies of certain classes of policy holders without proper notice as required by the California Insurance Code.
US Financial Termination of Life Insurance Policies ComplaintCase Event History
US Financial Termination of Life Insurance Policies Complaint
May 5, 2020
Life insurance is generally held long-term. The complaint for this class action alleges that US Financial Life Insurance Company terminated the policies of certain classes of policy holders without proper notice as required by the California Insurance Code.
US Financial Termination of Life Insurance Policies Complaint