Two long term care insurers and a third party administrator have settled a class-action lawsuit in Missouri.

The plaintiffs in the case accused the defendants of selling long term care insurance policies while knowing that the premiums ultimately would be raised.

The defendants — Mutual of Omaha Insurance Company, Omaha, Neb.; American Heritage Life Insurance Company, a division of Allstate Corp., Northbrook, Ill.; and Wakely and Associates Inc., Largo, Fla. — have agreed to resolve the case by providing life insurance policies and other benefits with a value of up to about $15 million.

The defendants have denied any wrongdoing, and they say they would have contested the litigation “vigorously” if the case had not been settled, according to court papers.

The settlement was approved by a state court judge in Jackson County, Mo.

Eric and Carol Chalgren, the lead plaintiffs in the case, are Missouri residents who filed a suit in 2002 in connection with LTC insurance policies sold in Missouri from 1995 to 2000. The policies were written by American Heritage and administered by Wakely and Associates. Some of the policies were coinsured by Mutual of Omaha.

The Chalgrens alleged in the suit that the defendants had set initial policy premiums low while planning to impose steep rate increases later.

After the Chalgrens sued, other Missouri residents who had bought American Heritage policies joined in a class action.

The terms of the settlement agreement call for American Heritage to pay $750 to each lapsed policyholder not on claim, and also to provide each with a term life insurance policy carrying a face value of $2,000, paid up for 1 year.

The court valued the American Heritage share of the settlement at about $2.5 million.

Mutual of Omaha has agreed to offer paid-up policyholders in the suit coverage for any future LTC claims, up to the total of any premiums they already have paid. The court valued this benefit at up to $8.5 million.

Wakely agreed to settle any claims against it for $4 million.

“American Heritage Life Insurance Company is confident the long term care policies were properly designed and priced,” Mike Siemienas, an Allstate spokesman, says in a statement about the case. “AHLI is pleased with settlement and that this matter is resolved.”

Wakely declined to comment.

At press time, Mutual of Omaha had not replied to a request for comment.