Private investigators found that a California resident who filed a claim for long-term care benefits with Transamerica was healthy enough to work a demolition job for at least seven hours and to shop on his own at Costco for 30 minutes, Transamerica told the U.S. District Court for the Northern District of California.
The insured, John Egan, did not respond to a lawsuit Transamerica filed with the court in July 2025.
U.S. District Judge James Donato entered a default judgment against Egan last week.
"Overall, the complaint plausibly and adequately alleged that Egan filed a false claim of coverage with Transamerica, misrepresented his qualifications for coverage, and fraudulently obtained benefits payments," Donato wrote in an opinion discussing his ruling.
Donato awarded Transamerica a total of $172,299 in damages, including recovery of $148,497 in benefits it paid to Egan and $23,801 to reimburse Transamerica for the amount it spent on surveillance and independent medical examinations.
Donato also awarded Transamerica $35,073 in attorney's fees and $1,031 in court costs, but he declined to award punitive damages.
Egan could not immediately be reached for comment. Transamerica declined to comment.
The policy: Transamerica Life Insurance Co. issued a flexible-premium, adjustable life insurance policy with a $500,000 initial face amount to Egan in 2020, when he was 55, according to an exhibit filed with the complaint.
The policy came with a $500,000 critical illness accelerated death benefit rider and a comprehensive long-term care insurance rider designed to stay in force until age 121.
The first monthly charge was $361.08, and the LTC rider cost $35 per month.
The claim: Egan filed a claim under the LTC rider in September 2023. He said he was unable to handle bathing, dressing, getting out of bed, or going to the bathroom by himself without hands-on assistance because he had broken his ankles in an automobile incident earlier in the year.
Transamerica assessed Egan over the telephone in November 2023 and found, based on what Egan said, that he suffered a severe level of functional limitation and was eligible for LTC benefits, according to the complaint.
He submitted care records on what appeared to be a home care service's stationery.
The investigation: Transamerica personnel believed in 2024 that Egan should have recovered more ability to function. The company hired an investigator to watch him.
The investigator found that Egan "went to work at his job in demolition for a period of seven hours," the company said. "He drove a car routinely. He repaired his truck on multiple dates, including standing and walking for a protracted period of time. He unhitched a large trailer from his truck. He filled his truck tires with air."
Transamerica sent Egan to an independent doctor for an in-person medical examination.
Egan came to the examination "ambulating on a motorized scooter, which he claimed to need," according to the complaint. "He reported consistent and extreme pain."
The examiner agreed, based mainly on what Egan said, that Egan qualified for LTC rider benefits.
Transamerica then sent an investigator to watch Egan a second time.
Egan "went to the grocery store and the Apple store to shop alone," Transamerica said. "He reached and bent, and carried large items. He spent 30 minutes shopping alone in Costco. He ambulated outside the home alone without a cane. He loaded and unloaded his vehicle."
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