Christina Spicer  |  April 27, 2021

Category: Consumer News

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UPDATE:

  • The Supreme Court of the United States (SCOTUS) declined to hear State Farm’s appeal to a lower court’s ruling upholding a $34 million jury trial award on Monday, April 27, 2021.

State Farm was hit with a $34.3 million trial verdict over class action allegations that the insurer took more from universal life insurance policyholders’ accounts than permitted.

The State Farm universal life insurance deduction class action lawsuit claimed that the company used prohibited factors to calculate the cost of the universal life insurance products, leading to overpayment by policyholders.

The lead plaintiff alleged that he had overpaid by $3,000 for his $100,000 life insurance policy.

The insurance giant fought back and succeeded in getting punitive damages trimmed, arguing that it had not acted with reckless disregard or evil motive in assessing the policyholders’ rates.

However, the company also argued that the State Farm universal life insurance deduction class action lawsuit should have been dismissed because it advertised maximum costs, but did not charge policyholders over the amount advertised.

“Because State Farm charged Plaintiff COI rates consistent with the terms of his policy, there is no genuine dispute as to any material fact, and State Farm is entitled to judgment as a matter of law on all of plaintiff’s claims,” stated the motion to dismiss the State Farm universal life insurance deduction class action lawsuit.

However, a federal court judge refused to toss the State Farm universal life insurance deduction class action lawsuit in its entirety.

After a four-day trial, State Farm was hit with the $34.4 million jury verdict. The jury found that the company engaged in breach of contract and conversion as alleged in the State Farm class action lawsuit.

The company had also asked the federal court to decertify the Class in the State Farm universal life insurance deduction class action lawsuit. Class Members who were not injured by State Farms’ fee assessing practices should be removed, argued the insurer, as opposed to simply not receiving an award.

Further, argued the company, some members of the Class in the State Farm insurance class action lawsuit would actually be assessed at a higher rate.

According to the State Farm universal life insurance deduction class action lawsuit, the lead plaintiff purchased his universal life policy from the company in 1999.

The plaintiff alleged that although State Farm used age, sex, and race to determine his policy rates, the company also used “unauthorized factors” that led to a higher rate.

According to the plaintiff, this action led to him and other Class Members paying higher rates over long periods of time, 14 years in the plaintiff’s case, leading to thousands in damages.

State Farm fought the $34 million jury verdict. The Eighth Circuit Court of Appeals affirmed the jury’s decision and SCOTUS declined to hear the insurer’s arguments.

“After employing every appeal and delay tactic available to it, State Farm will finally be obligated to pay the jury verdict returned nearly three years ago,” a lawyer representing the plaintiffs told Law360 of the Supreme Court’s decision not to hear the case.

Top Class Actions will continue to monitor this lawsuit for further developments.

Are you a Class Member in the State Farm universal life insurance class action lawsuit? Tell us about your experience in the comment section below!

The lead plaintiff and Class Members are represented by Patrick J. Stueve, Norman E. Siegel, Ethan M. Lange, and Lindsay Todd Perkins of Stueve Siegel Hanson LLP and John J. Schirger, Matthew W. Lytle, and Joseph M. Feierabend of Miller Schirger LLC.

The State Farm Universal Life Insurance Deduction Class Action Lawsuit is Vogt, et al. v. State Farm Life Insurance Co., Case No. 20-1008, in the U.S. Supreme Court.

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249 thoughts onJury Awards $34.3M in State Farm Life Insurance Fees Class Action

  1. Randy Klein says:

    My husband and I have been paying on A Universal Life insurance policy since July 1984.
    We need to be added to the class action lawsuit.We were also told the policy would pay for itself in 7 years. We arenow paying on it for 40 years.

  2. Michael Cooper says:

    Both my wife and I received payments from the State Farm class action lawsuit in 2023. Is this money tax deductible? The letter accompanying the settlement stated it was our responsibility to determine if the payment taxible income. We have not received a 1099 misc tax form from State Farm as of this date 02/22-24.

  3. Tim says:

    I had my Universal Policy with State Farm for 30 years. I finally had to let it lapse because of the cost. The cost of the insurance kept rising as I aged. I might have been able to keep the policy longer if I wasn’t overcharged for the insurance as the class action suit states.

  4. Doug R minor says:

    I’ve had state farm universal life for probably 50 years and they are always telling me that if I didn’t increase payments my policy would expire. They kept having me pay more to keep it from expiring.

  5. Paulette Johnson says:

    My husband and I have had universal life insurance with State Farm for over 35 years. Our agent Lowell Thomas told us we would never pay anymore than what our original premium was and never explained how it could and would be affected by the economy, stock market, or interest rates. Our premium doubled last year with the threat of lapsing. Now today it is under threat again if we don’t double our premium again. I mean this is criminal and highway robbery !!!!!! We are 57 and 60 now with no end in sight and no guarantees it won’t be increased again. Our original agent retired 20 years ago, I believe, and we’ve been with Cathy Carpenter since then. If these policies weren’t written correctly by State Farm why aren’t they responsible??? It is their responsibility and their fault but we are left to pay for it. Their catch phrase of .. Like a good neighbor, State Farm is there. Yeah, there to lie and steal from you !!! We need added to this lawsuit!!!!
    Daniel & Paulette Johnson of Maryland.

    1. Taylor says:

      I’m asking these attorneys now. To help with a policy from 41 years ago. I was told at 18 when I was 44 the policy would be worth 1.4 million . I found out today Jan 3rd 2024 cash value is less than 3 grand and the policy it only worth 50 thousand.
      To my detriment I relied on these lies for 41 years. I will be 60 soon I can’t even get much insurance worth anything at my age. I might have been able to get whole life with set rate at 25-30 years old but that’s 30 plus years to . What a mess I think the government and state farm are liable. The don’t have a State Insurance Commission for the fun of it. It’s to uphold the law and fair practice. It shouldn’t be to cover lying insurance companies. Follow the money and where is the 60 grand paid in and my cash payout is less than 3 grand now. I would rather of flushed 60 grand down the toilet myself than let these cons take it.

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