Wilco Life Insurance Policy Termination California Class Action

A number of recent class actions have involved the legal requirements for the lapse or termination of life insurance policies under California laws. This is because life insurance works best for the policyholder when it’s a long-term investment. In this case, the defendant is Wilco Life Insurance Company, which the complaint claims violate California safeguards regarding life insurance policy termination.

The complaint alleges that the laws were passed to protect life insurance policyholders, including senior citizens and those who are ill. They include requirements for what companies must do before terminating a policy or allowing it to lapse, and also a requirement to inform policyholders each year that they may appoint another person to receive notices about their policies.

The complaint says California “requires strict compliance with all statutory and contractual provisions” regarding terminations. “In other words, 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.”

This case is brought by Julie Grundstrom, daughter of Richard Dr. Richard I. Appleton, who was insured under a policy with Wilco.

Appleton, the complaint says, paid his premiums for more than twenty-five years. In recent years, he had become very sick.

The complaint claims Wilco should have provided a sixty-day grace period and a thirty-day written notice of impending lapse, but that no such period or notice was provided.

In May 2018, Grundstrom called Wilco to confirm that the next quarterly payment was due on August 8, 2018; she later reconfirmed this through an automated system. On July 17, 2019, Wilco sent Appleton a letter indicating his policy had lapsed as of July 14. Appleton then sent a check dated July 22 to pay the premium, which Wilco cashed.

On August 6, Appleton contacted Wilco again to make sure the policy was still in force. Wilco then refunded the July 22 payment. The July termination letter had invited Appleton to apply for reinstatement, but Appleton was then terminally ill with stage four prostate cancer and could not qualify.

He died on September 27, 2018. The complaint claims that because Wilco did not satisfy California’s requirements for policy termination, the policy was still in force.

The class for this action is all past, present, and future owners or beneficiaries of Wilco’s individual life insurance policies in force on or after January 1, 2013 and governed by Sections 10113.71 or 10113.72, where the policies underwent or will undergo a lapse, termination or reinstatement without Wilco first providing written notice and an actual do-day grace period, a thirty-day notice of pending lapse or termination, and an annual notice of a right to designate at least one other person to receive notices of lapse for nonpayment of premiums.

There is also an Elder Abuse Subclass, for members of the class who were 65 years old or older at the time of the lapse or termination.

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