EquiTrust Class Action Says Life Insurance Co. Charges Unauthorized Fees

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EquiTrust Life Insurance Company is facing a class action lawsuit accusing it of charging unauthorized fees when customers die or surrender their life insurance policies.

According to the EquiTrust class action lawsuit, EquiTrust has more than $17 billion in assets and it specializes in selling life insurance products designed to assist customers with their wealth transfer goals.

EquiTrust says the benefits of its life insurance policies include death benefits that bypass probate; tax-deferred growth; guaranteed minimum cash value and death benefit; and access to partial withdrawals and loans. Benefits are typically paid upon surrender or death.

“According to the policies, when insureds surrender the policy they receive the greater of a Minimum Guaranteed Cash Value or the Accumulation Value less a Surrender Charge,” the EquiTrust class action lawsuit says. “When an insured dies, her beneficiaries receive the greater of the Face Amount of the policy or the Minimum Cash Value or Accumulation Value multiplied by certain factors.”

The only other deductions permitted from these final payments are outstanding loan balances, the EquiTrust class action lawsuit says.

Despite these policies, EquiTrust imposes two additional deductions, plaintiffs Howard Albert and Maria Soyka allege. They claim that EquiTrust deducts a Cost of Insurance Charge and a Policy Expense Charge, both of which are meant to be deducted only on the policy date and each policy anniversary.

“As a result, insureds or their beneficiaries are assessed thousands of dollars of fees for future services that are not rendered when the policies are paid,” the EquiTrust class action lawsuit says. “These fees are not permitted under the language of EquiTrust’s policies, language that EquiTrust itself drafted.”

Albert says he purchased an EquiTrust policy in 2014, and requested to surrender the policy on July 12, 2017. According to the life insurance class action lawsuit, EquiTrust deducted $1.698.33 for Policy Charges/Fees and Cost of Insurance when executing the surrender of Albert’s policy. Albert claims that, under the terms of EquiTrust’s policy, it was only permitted to deduct these amounts on the policy anniversary, and not at the time of surrender.

Soyka says she purchased an EquiTrust policy in 2013 and another in 2014. According to the EquiTrust class action lawsuit, she still owns both policies, but would be charged more than $1,600 upon surrender or payment of the death benefit for each policy.

Albert and Soyka filed the EquiTrust class action lawsuit on behalf of themselves and a proposed Class of persons and entities that owned life insurance policies issued by or on behalf of EquiTrust that did not state that the Cost of Issuance and Policy Charges/Fees would be deducted from the Cash Surrender Value and Death Benefit.

The EquiTrust class action lawsuit asserts claims for breach of contract, injunctive relief, and declaratory relief. The plaintiffs are seeking compensatory and statutory damages, attorneys’ fees and costs, and other relief deemed appropriate by the court.

The plaintiffs are represented by Seth E. Miles, David M. Buckner and Brett E. von Borke of Buckner + Miles and by John Herskowitz of Baron & Herskowitz.

The EquiTrust Unauthorized Payout Fees Class Action Lawsuit is Howard Albert and Maria Soyka v. EquiTrust Life Insurance Company, Case No. 1:18-cv-20584-UU, in the U.S. District Court for the Southern District of Florida.