Ratner v The Lincoln National Life Insurance Company
Lincoln National Life Customers Angry Over "Risk Free" Periods
A nationwide class action has been filed in Ohio against life insurance giant, Lincoln National Life Insurance Company. The action is brought on behalf of all U.S. residents who purchased life insurance policies from Lincoln and paid for such policies upon delivery, but who were actually charged a premium based on the earlier "policy date" when the policy was approved. The action is brought under state law for breach of contract and unjust enrichment and seeks compensatory damages, disgorgement of profits and injunctive and declaratory relief.
According to consumers, Lincoln engages in an intentionally deceptive practice in the writing of its insurance policies. Consumers allege that policies become effective when they are actually delivered to the policyholder and the first premium payment is made. This is known as the "effective date" of the policy. However, consumers allege that Lincoln calculates and bills for premiums using the "policy date", or the date in which the policy is actually approved by the underwriting department of Lincoln and the policy is issued. The effect of this arrangement is that there is an alleged "dead" period, or a "risk free" period when Lincoln is "collecting" a premium, but is not bound to provide coverage. This "risk free" period can last days, weeks or months, depending on when the policy is actually delivered to the consumer. However, as premiums are allegedly computed an on annual basis, any time when the insured was not covered by insurance, but was under an obligation to pay a premium, benefits Lincoln as they are collecting funds for services not provided. Consumers allege that Lincoln's disclosure statement is misleading and confusing and leads the average consumer to believe that the date coverage is effective is the "policy date", not the "effective date". According to consumers, other insurance companies issue a clear disclosure of this policy and offer special insurance to cover the insured during the "risk free" period when the policy has been written and approved, but is not in effect. Lincoln, consumers claim, does not make this fact known to consumers. Consumers allege that Lincoln is well aware that it is collecting funds for services not being provided and that it is intentionally misleading consumers in order to unjustly enrich itself at their expense.
