Lincoln National Class Action Challenges Excessive Insurance Rates

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

Two insureds under Lincoln National Life Insurance policies claim the company has unlawfully increased their premiums for the same level of coverage.

Plaintiffs Bharti Bharwani and Robert Zirinsky are accusing Lincoln National Life Insurance Company of unilaterally increasing the cost of insurance rates on certain life insurance policies.

For plaintiffs and others similarly situates, that increase translates to a substantial increase in the amount of their annual premiums, the class action claims.

According to the plaintiffs, Lincoln National is raising its cost of insurance rates merely in response to poor returns in its investment portfolio. Nowhere in the policy’s terms is Lincoln National allowed to do so, the plaintiffs claim.

The class action lawsuit says the cost of insurance increase that Lincoln National imposed leads to an increase in the monthly deduction charge, the amount Lincoln National charges to cover the cost of insurance, administrative charges, and any riders due that month.

Lincoln National collects the monthly deduction by taking it out of the policy’s current dollar value. The increase in the monthly deduction requires policy holders to pay a substantially higher premium to keep the policy in effect at the same level of coverage, the plaintiffs claim.

The lawsuit also accuse Lincoln National of using the premium increases to induce many of their policy holders to terminate their policies en masse – a tactic the plaintiffs say is known as “shock lapses.”

Both Bharwani and Zirinsky say they purchased life insurance policies from Lincoln National’s corporate predecessor Jefferson-Pilot Life Insurance Company back in 2003. Lincoln National acquired Jefferson-Pilot through a 2006 merger, assuming responsibility to provide coverage under Bharwani’s and Zirinsky’s policies.

Bharwani’s policy has a face value of $500,000. She says that in October 2016, she received a notice from Lincoln National notifying her of an increase in her annual premium due to the cost of insurance increase. To maintain coverage at her existing level, she was told, her annual premium would have to increase from $4,700 per year to $5,085 per year for the current policy period.

Zirinsky got a similar notice regarding his Lincoln National life insurance policy with a face value of more than $1.7 million. In September 2016, he says he was told the cost of insurance increase would result in his annual premium going from $186.55 per year to $4,203 for the current policy period.

Bharwani and Zirinsky propose to represent a nationwide plaintiff Class consisting of all persons in the U.S. who since Sept. 1, 2016 were subject to a cost of insurance rate increase on a Jefferson-Pilot-issued universal life insurance policy that resulted in a higher monthly deduction charge than what the prior effective rate schedule would have imposed.

They are asking the court for an award of damages, injunctive and declaratory relief, court costs, witness fees and attorneys’ fees.

The plaintiffs are represented by attorneys Jeffrey W. Golan, Robert A. Hoffman, Lisa M. Port and Stephen R. Basser of Barrack Rodos & Bacine, Andrew Friedman of Bonnett Fairbourn Friedman & Balint PC, Joseph Gentile and Ronen Sarraf of Sarraf Gentile LLP, and John G. Emerson of Emerson Scott LLP.

The Lincoln National Life Insurance Cost Increase Class Action Lawsuit is Bharti R. Bharwani, et al. v. Lincoln National Corp., et al., Case No. 2:16-cv-06605, in the U.S. District Court for the Eastern District of Pennsylvania.