John Hancock Hit With Class Action Lawsuit Over Cost of Insurance In Some Universal Life Policies

A class action lawsuit filed in the United States District Court in New York, alleges that John Hancock Life Insurance Company (U.S.A.) has forced policyholders to pay “unlawful and excessive cost of insurance (“COI”) charges,” as well as “unlawful and excessive premiums.”

According to the filing, policy provisions in the John Hancock policies referenced “specify that monthly cost of insurance (“COI”) rates “will be based on ”expectations of future mortality experience – and nothing else.”  In addition, the filing notes that the carrier “contractually promised to review those mortality-only based COI rates at least once every 5 policy years.”  Based on those policy provisions, the suit further alleges, John Hancock agreed to “decrease COI rates on its customers when there is an improvement in mortality.”

Noting that “nationwide mortality rates have declined significantly over the past several decades,” and that the carrier itself stated “in regulatory filings over the past 15 years that mortality experiences were substantially better than it expected,” the lawsuit is asking for “monetary relief for the COI overcharges that John Hancock has wrongly imposed on its customers.”

The suit also charges that the carrier collected “unauthorized additional premiums under an Age 100 Waiver of Charges Rider (“Age 100 Rider”) included in certain John Hancock life insurance policies.”  The Age 100 Waiver of Charges Rider states that after the insured reaches age 100 no additional premium will be collected on the policy.  According to the suit, there is an additional charge for this rider and the policy “sets the additional premiums that John Hancock could charge and the period of time in which these additional premiums would need to be paid under the Age 100 Rider.”  Those additional premiums could only be charged, according to the filing “during the years in which the underlying insureds were 32 years old or younger.  The policy did not provide for or permit John Hancock to charge any additional premium for the Age 100 Rider for insureds that were 33 years old and older.”  However, the suit alleges that “John Hancock charged plaintiff additional premiums for the Age 100 Rider even though the insureds were older than 32 years old.”  Those filing the suit seek “monetary relief for these impermissible additional premiums charged by John Hancock and paid by plaintiff and other similarly situated policyholders.”

The lawsuit, filed on December 21st is an interesting way to end 2015, a year in which a number of carriers raised COI rates on its policies.  ITM TwentyFirst will be following this case closely and reporting back as the case progresses.

8 thoughts on “John Hancock Hit With Class Action Lawsuit Over Cost of Insurance In Some Universal Life Policies

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  3. My mother worked for JH paid a huge sum of monies for her LTC. The family has been satillite abused through the entrie process. JH taking too much time to pay bills causing depletion of funds. The family having to cash in stocks just to pay for her care during the trying months is paying her high premiums + her care + her bills.

  4. Would appreciate an update on the status of this class action lawsuit as I was charged for fourteen years to cover this waiver that I did not know existed until recently. Thank you. Did it settle? Who would I countact. What firm handled the suit? Thank you, Kay

  5. Just found out there is a life insurance policy with John Hancock. I am unable to get the company to help me. What should I do?

  6. My spouses mother had a policy with JH that we discovered a couple years after her death and we fought with reps on phone that wouldn’t reveal any info to us. We battled with them for about a year (while being homeless) and got no where. Its been that way a few years now. Is there anything we can do (don’t have money to secure lawyer…and from Minnesota if it helps– we seen class action lawsuit a couple years back but Minnesota wasn’t involved or covered) ty

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