A life insurer is facing a lawsuit over a $25 million term life policy that went through a partial universal life conversion and division process.
Michael Drummond — one of the four adult children of the woman who bought the original term life policy, and one of the policy's four beneficiaries — said he is having trouble collecting the benefits he believes he is owed because Transamerica does not acknowledge having received beneficiary change forms.
Drummond is suing individually and as the trustee of the Michael A. Drummond revocable trust, according to a complaint Michael Drummond filed earlier this month in the U.S. District Court for the Northern District of Alabama.
He has named Transamerica Life and Crescent Wealth Management as the defendants.
Drummond's siblings are not parties to the suit.
Transamerica Life declined to comment on the suit.
Crescent Wealth Management could not immediately be reached for comment.
What it means: The case could show how a federal court sees the administration of a large term life insurance policy that has been split up and exchanged for universal life coverage.
The term life policy: Transamerica Life Insurance Co. sold the original term life policy to Peggy Drummond, the wife of Garry Drummond Sr.
Garry Drummond Sr. was the chairman of the Drummond Co., a coal company based in Birmingham, Alabama.
The beneficiaries of the term life policy were Peggy Drummond's four children.
The universal life conversion: In 2019, when the term of Peggy Drummond's term life policy was about to expire, Transamerica Life offered her four children a chance to exchange the term life coverage for universal life coverage.
People can use universal life insurance to fund retirement arrangements and support other long-term goals, as well as to provide a death benefit.
Michael Drummond and Christopher Drummond exercised the conversion universal life option with help from agents at Crescent Wealth Management.
The brothers exchanged half of the value of the term life policy for $12.5 million in universal life insurance.
Two siblings, Cynthia Drummond Kinnebrew and D. Bryan Drummond, did not exercise universal life conversion options.
Peggy Drummond died in 2025.
The benefits: Transamerica sent Cynthia Kinnebrew and D. Bryan Drummond claim statements offering them a chance to file claims for death benefits under the universal life policy.
The company paid Michael Drummond $3,143,676 in benefits.
"Transamerica claims that it did not receive the beneficiary change forms submitted for the UL policy and is, therefore, withholding the remaining death benefits owed under the UL policy," even though Cynthia Kinnebrew and D. Bryan Drummond have not presented competing claims for death benefits under the universal life policy, according to Michael Drummond's complaint.
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