Life Insurance Policyholders Denied Proper Cancellation Notices Before Terminating Policies Obtain Class Certification

PR Newswire

Craig M. Nicholas of Nicholas & Tomasevic provides statement

SAN DIEGO, April 26, 2023 /PRNewswire/ -- In a big win for life insurance policyholders in California, the United States District Court for the Eastern District of California granted in part a motion for class certification brought by Deana Farley against Lincoln Benefit Life Company. The lawsuit alleges that Lincoln Benefit failed to provide proper cancellation notices before terminating California policies. For life insurance policies in force on or after January 1, 2013 the lawsuit alleges: 1) life insurers must provide at least 30 days written notice of a pending lapse before terminating a policy for nonpayment of premium; 2) insurers must also provide a 60-day grace period; and 3) insurers must give policy owners an opportunity to designate a third party to receive important notices regarding the policy.

The practical effect of the decision is that thousands of Lincoln Benefit policies that originated in California or the insured moved to California are certified for determination in the class action alleging improper termination of policies. The lawsuit alleges the insureds have the right to have their policies revived or to receive benefits if the policyholder is deceased.

Nicholas & Tomasevic and Winters & Associates have filed more than 18 class action lawsuits against insurance companies arguing that the insureds and beneficiaries in California are entitled to policy proceeds upon death of the insureds or revival of wrongly terminated policies. The law firms are investigating other insurers that also failed to give the required notices to policyholders and illegally terminated life insurance policies, including New York Life Insurance Co., Northwestern Mutual Life Insurance Co., Gerber Life Insurance Co., AAA Life Insurance Company and Banner Life Insurance Company.

"The Insurance Code is there to protect surviving spouses and beneficiaries, and the elderly and infirm who are the most vulnerable among us to an inadvertent lapse of life insurance after years of faithful payments," said Mr. Nicholas. "This is a significant victory for the elderly and disabled that lost life insurance coverage through inadvertence or inadequate notice before termination." If your life insurance policy or that of a loved one lapsed after 2013 without payment of benefits, you may have valuable but unknown claims.

Mr. Nicholas is available for comment at cnicholas@nicholaslaw.org or (619) 325-0492. Mr. Winters is available for comment at pjsandiego@gmail.com or (619) 234-9000.