TransAmerica Sued Over Devestating Premium Hikes

By on July 21, 2016

A consolidated class action complaint filed in Los Angeles federal court in June accuses TransAmerica of improperly and dramatically raising rates on universal life insurance policies.

According to the complaint, brought on behalf of a national  class of TranAmerica universal life customers, TranAmerica breached its contract with customers by improperly inflating its cost of insurance, and demanding massive premium increases of as much as 100% in order for customers to maintain their coverage.

According to the allegations, TransAmerica is punishing its clients for its inability to earn adequate returns for its investments, and trying to stick policy holders for its own failures.

The increased premiums hit senior citizens particularly hard because they account for the vast majority of the impacted policyholders and  would not qualify for reasonable insurance now due to their age.  The limited budget of most seniors also makes it extraordinarily difficult for most to pay the much higher premiums, leaving them with choosing between paying something they can’t afford or losing insurance on which they have paid premiums for decades.

This is precisely TransAmericas plan, according to the allegations: coercing policy holders into surrendering policies so TransAmerica doesn’t have to pay.  Although TranAmerica offers alternatives to surrender, none of them are attractive, such as material reductions in the face amounts of the policies.

The class action seeks to stop and reverse the premium raises and to recover damages for policy holders.