On January 20, 2011, California Federal District Court Judge, A. Howard Matz, ruled against Conseco Life Insurance in a class-action lawsuit. The lawyers for the plaintiffs said that Conseco’s plan to raise rates would have tripled policy rates for over 50,000 customers, most of which are elderly Americans. The suit against Conseco involved Valuelife and Valuterm universal life insurance policyholders.
The attempted insurance rate increase would constitute a breach of contract if implemented. Judge Matz also agreed with allegations that Conseco deliberately used the proposed rate increase to duck a requirement by the Indiana Department of Insurance. They sought to use the rate hike to avoid a requirement to add $100 million to its reserves. Conseco adopted the planned increase in 2002, just before they filed for Chapter 11 bankruptcy. The proposed hike was supposed to take effect when policies reached their 21st year, which would have been in 2010 and 2011.
The plaintiffs and their lawyers were ecstatic that the court blocked this illegal rate hike. A spokesman for CNO Financial Group, parent company of Conseco Life, stated the company intends to file an appeal.
Annuities Offer Lifetime Income
An annuity is designed to protect people from outliving their income. Contributions are converted into periodic payments that can last a lifetime. This type of financial vehicle is used to help accumulate money for retirement. Investors make payments over a certain period of time or by a single payment in one lump sum. These annuities can be obtained through a variety of insurance companies. Contributions are then invested into stocks and bonds, generating income for both the investor and the insurance company. This may be a better option for individuals who do not want to purchase term life insurance. Annuities can be structured to pay out funds over a fixed or variable amount of time, depending upon the individual’s needs. Consult with a financial advisor to learn the many benefits of investing in annuities.