Jury Awards $34MM to State Farm Policy Holders

After two hours of deliberations, a federal jury in Missouri awarded more than $34 million to State Farm policyholders in a class action trial.  The class action was brought on behalf of around 24,000 current and former owners of universal life insurance policies issued in Missouri.  Universal life insurance is a type of life insurance that includes an interest-bearing savings account from which the insurer deducts money each month to cover the cost of the life insurance.  The jury found that State Farm systematically overcharged its policyholders for 23 years.  (Vogt v. State Farm Life Insurance Co., 16:4170-CV-C-NKL). 

The case is one of several cases across the country being prosecuted by Stueve Siegel Hanson LLP and Miller Schirger LLC against insurance companies for overcharging universal life insurance policyholders.  In a pretrial ruling, the Court determined that State Farm violated the 94030-25 policy as a matter of law.  The jury was asked to determine if the violation caused damages to policyholders and, if so, the amount of those damages.  The trial lasted three days. 

If the award is sustained on appeal, class members will be notified of the right to share in the settlement at a later date. “This is a great story of the little guy taking on a huge company and winning” said Norm Siegel, who delivered the opening and closing arguments to the jury.  “The most egregious aspect of these cases is that there is no reasonable way for a policyholder to know that they’re being overcharged because the overcharge is hidden behind a complex, actuarial ‘cost of insurance rate’ that is indecipherable to the average person.  You have to hire a lawyer and actuary to deconstruct that rate and compare it to the proper rate to know you’re being damaged.  You can be overcharged for decades without knowing, which is what the jury found here.” 

Stueve Siegel Hanson and Miller Schirger are prosecuting several other cases of life-insurance policyholders who it is alleged have been overcharged across the country.    They have obtained settlements making available relief valued at over $2 billion to policyholders.  If you have a variable universal insurance policy that you would like to have evaluate, or want more information, please visit www.stuevesiegel.com/ssh/investigations/cost-of-insurance.

 

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