NU Online News Service, July 22, 1:04 p.m. – John Hancock Financial Services Inc., Boston, says it has settled a national class-action lawsuit involving policyholders who paid life insurance premiums on a monthly, quarterly or semi-annual basis, rather than annually.
The lawyers who brought the “modal premium” case, which was filed in a New Mexico state court, say Hancock failed to give 1.5 million customers enough information about the extra costs involved with paying premiums on something other than an annual basis.
Hancock has agreed to pay settlement death benefits of $800, $1,100 or $1,400 to affected policyholders, depending on the policyholders’ circumstances.
After taxes, the cost of providing the extra death benefits and paying the related legal and administrative expenses will be about $19.5 million, Hancock estimates.
The modal premium suit is one of 21 modal premium class-action suits brought against insurers, Hancock reports.