Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
A statue showing the goddess of justice holding up scales. (Image: Adobe Stock)

Life Health > Life Insurance

Life Policy Buyer Sues Over Age Conflict

Your article was successfully shared with the contacts you provided.

A financial services firm is suing an insurer over a conflict between the age of a woman stated on the woman’s life insurance policy and the age on her death certificate.

The firm, BMI Financial Group, bought the policy from the insured in 2005. In its complaint, it asserts that, because of the age conflict, it made too many premium payments, received too little for death benefits, or both.

The Miami-based firm contends that the life insurer, ReliaStar Life Insurance Company, should have found and corrected the age conflict.

“ReliaStar owed plaintiff and its predecessors-in-interest a duty to exercise due care in recording and verifying information material to the policy and in representing the results of its recording and verification to plaintiff and its predecessors-in-interest,” BMI says in the complaint, which appears in the litigation tracking database provided by ALM’s Law.Com Radar. Read the full complaint here.

Representatives for ReliaStar were not immediately available to comment on the suit.

What It Means

Some life insurance lawsuits hinge on whether applicants gave the wrong birthdates to qualify for coverage or pay lower rates.

The BMI suit shows that, in some cases, beneficiaries or other parties may find fault with how insurers and their agents record, store or verify customers’ age information.

The Policy

Regina Bell applied for a policy with a $2 million death benefit from ReliaStar in 2002. She received the policy in 2003.

A ReliaStar agent wrote — incorrectly — that Bell was born in 1922 and was 80 years old, according to BMI.

Policy premium bills were supposed to end when the insured turned 100.

After Bell sold the policy to a BMI affiliate, the affiliate paid $27,285 per month to keep the policy in force. By the time Bell died in December 2020, the affiliate had paid about $3 million in premiums.

A doctor certified at the time of death that Bell was born in 1920, not 1922, and was 102, not 100.

BMI had paid the monthly premiums for more than a year after the 100th anniversary of the birthdate given in the death certificate.

ReliaStar asserted that Bell had misstated her age on the application and that it paid the BMI affiliate only $934,740.73, not $2 million.

BMI argues that ReliaStar’s own agent put down the wrong age and that ReliaStar had collected premiums based on the 1922 birthdate given in the application and policy.

“ReliaStar breached its duty by failing to exercise due care in recording Mrs. Bell’s birthdate on the application, by failing to exercise due care in verifying Mrs. Bell’s birthdate, and by failing to correct the error created by its own wrongdoing in recording Mrs. Bell’s date of birth,” BMI says in the complaint.

BMI has accused ReliaStar of misrepresenting Bell’s age in a negligent way, using the incorrect age information to induce the BMI affiliate to pay the wrong amount of premiums, breach of contract and unjust enrichment.

BMI is asking for a jury trial and more than $750,000 in damages.

Lawyers for BMI originally filed the suit in March in a state court in Miami.

Earlier this month, a state court judge approved ReliaStar’s request to move the case to the U.S. District Court for the Southern District of Florida.

(Image: Sergign/Adobe Stock)


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.