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ANICO Was Charged With A Class Action Lawsuit Due To Extra Charges

American National Insurance Company (ANICO) was charged with a class action lawsuit due to allegations that extra charges were added to their consumers’ bills.

The Class Action Lawsuit

In December 2020, the lead plaintiff, Joe S. Yearby, filed the class action lawsuit in a California federal court.

The lawsuit claims that ANICO has charged their policyholders with the high cost of insurance charges. 

It argues that the charges were inflated and should not be permitted covered in their existing contracts.

Plaintiff Allegations

The lead plaintiff alleges that ANICO has breached clauses in their life insurance contracts by billing customers with high amounts for the cost of insurance (COI).

According to the complainant, the life insurance contract states that COI’s amount should be changing from time to time. 

It adds that the amount is calculated based on the policyholder’s mortality experience. 

However, the plaintiff argues that the COI billed to him has never decreased in amount and has only continuously increased monthly. 

He adds that the company’s claim in the contract that the amount is being reviewed regularly is false. 

The amount billed to him has regularly gone up despite his improving mortality expectation.

Insurance Contract

Joe states that the insurance he has bought from ANICO is a flexible-premium universal type of life insurance (UL). 

This type of insurance has both investment and death benefits. The earnings from the savings or investment part are also called policy value or cash value.

According to the class action lawsuit, the premium being paid for this insurance covers the COI charges and other admin charges. These charges are deducted monthly from the customer.

The COI value is defined as the cost determined to cover the policyholder’s assessed death risk. It is also known as the mortality charge or pure fee of protection charge.

The lead plaintiff believes that the COI value should change depending on the policyholder’s condition since it is the cost paid for providing death coverage to the insured, which is why it is the most expensive amount charged in the insurance.

The complainant argues that this should be regularly reviewed since it is a significant deduction to the policyholder’s account. 

He adds that the amount should also fluctuate down and decrease if the condition of the policyholder improves.

According to Joe Yearby, there were multiple reports that the expected nationwide mortality has significantly improved for the past years, with an estimated 1% yearly improvement. 

Despite this, ANICO has not yet decreased the amount charged for COI.

The lead plaintiff attests that the company’s claims that it regularly reviews the COI amount are false because the COI amount billed to consumers should have been significantly lower than what they were charged.

He contends that ANICO has violated its contract with its customers by failing to review the COI charges that they bill fairly.

The class action that he filed aims to represent individuals residing in California with universal life insurance policies with ANICO.

Editor’s Note on ANICO Was Charged With A Class Action Lawsuit Due To Extra Charges:

This article is published to inform you of the latest class action lawsuit filed against ANICO due to alleged high COI charged to their customers.

What are your thoughts on this piece? Do you have a life insurance policy from ANICO?

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