Should You File a Genworth Lawsuit for Life Insurance Rates?

Consumers who have been affected by the recent hike in Genworth Life Insurance Company premiums may have a legal claim.

What Determines Life Insurance Rates?

According to Policy Genius, the following factors can determine a life insurance policy’s premium rates:

• Policy type: The type of life insurance policy will dictate its premiums. A whole life insurance policy that doesn’t expire upon retirement will have much higher premiums than term life insurance policies which expire at a certain age.
• Coverage amount: This is fairly straight forward. The larger the coverage and payout, the higher a policy’s premium.
• Term length: Policies with shorter terms may result in lower premiums. Similarly, longer terms or whole life insurance policies will have higher premiums.
• Insured’s personal factors: The health history, family history, medical exam results, driving history, credit score, and even hobbies of the insured person can all impact premiums.
• Riders: Riders that add additional policies can also increase premiums. Examples of common riders are long-term care riders, return of premium riders, waiver of premium riders, and critical care riders.

Have Genworth Life Insurance Rates Been Increased?

Genworth has reportedly been seeking to increase its rates since at least 2017. According to a 2nd Quarter earnings presentation from 2019, Genworth received 114 approvals for premium increases in 2017. In 2018, the company reportedly received 120 approvals.

These approvals from state insurance regulators mean that Genworth has been able to implement a price increase for many of its policies.

A financial planner told CNBC about one of his clients, a 66-year-old woman, who saw four premium increases on her long-term care policy. Over the past six years, the financial planner said his client’s annual premiums increased by more than 60%. In 2013, her yearly cost was $1,626. In 2018, it skyrocketed to $2,721.

According to Genworth’s website, premium increases such as these may be necessary if claims on various types of insurance are higher than expected. This influx of claims, or more costly claims, can lead to losses for the insurer, reportedly compromising their ability to pay future claims.

Although Genworth received authorization from state authorities to raise its insurance premiums, the company has faced lawsuits from consumers who argue that these extreme price hikes are not authorized under policy terms.

Have Genworth Life Insurance Lawsuits Been Filed?

In July, several plaintiffs took matters into their own hands by filing a Genworth class action lawsuit challenging the December 2019 price increases for GE Gold, First Choice Gold, GE Gold II, First Choice Gold II and all other universal life insurance policies.

According to the plaintiffs, these price hikes stemmed from an increase in the monthly risk rates used to calculate monthly premiums. In December 2019, Genworth reportedly told policyholders that monthly risk rates would increase by between 40% and 140% percent – leading to “massive” premium increases.

The Genworth price increase class action lawsuit claims that price increases on monthly premiums are not allowed under policies’ account terms. Genworth life insurance policies reportedly require that the insurer “make any change [to monthly risk rates] in order to recoup prior losses.” The plaintiffs contend that this is exactly what Genworth did despite its promises not to.

The Genworth class action lawsuit also alleges that the company has failed to apply the changes to the monthly risk rates to “all insureds” with the same age, numbers of years of insurance in force, net risk, and premium class. Instead of uniformly applying these changes, New York policyholders are allegedly exempt from the price increases.

“[T]he policyholders were promised the protection of the contractual guarantees that their policies would be credited with interest not less than four percent and that Genworth would not raise the Monthly Risk Rates to increase its own profits at their expense,” the Genworth class action lawsuit states.

Therefore, the plaintiffs argue that the increases were unlawful and must be reversed.

Plaintiffs in the Genworth class action lawsuit seek to represent a Class of Genworth universal life insurance policyholders who were subjected to the price increase announced Dec. 1, 2019.

The plaintiffs note that many of the policyholders affected by the recent price increases are 75 years old or older as the policies were issued, for the most part, nearly 20 years ago.

“These policyholders bought and maintained the policies so that they and their families would be protected by life insurance coverage as they entered their senior years,” the Genworth class action lawsuit contends.

Should I Follow A Genworth Lawsuit?

If you experienced a price increase on your Genworth life insurance policy, you may be eligible to file a Genworth lawsuit. Filing a Genworth lawsuit or joining an existing class action lawsuit could help you recover compensation for unfair price hikes.

The Genworth Class Action Lawsuit is Brigton Trustees LLC, et al. v. Genworth Life And Annuity Insurance Company, Case No. 3:20-cv-00240-DJN, in the U.S. District Court for the Eastern District of Virginia.