A class-action lawsuit filed against the Kansas City Life Insurance Co. alleges the company “systematically overcharged” customers without permission.
The case, filed by Kansas City law firms Stueve Siegel Hanson and Miller Schirger, claims the unauthorized charges comprised of hidden expenses called “loads.” These charges, the firms say, are contained in contractual policy charges and effectively drain a life insurance policy’s cash value.
“The policies may become unaffordable, leaving policy owners without life insurance when it is needed most,” the firms said in a joint news release.
Alan Craig Mason Jr., senior vice president and general counsel for Kansas City Life, declined to comment on the case. He added that the company has not yet been served with a lawsuit by the end of the day Wednesday and has learned of the case through media reports.
The two firms won a similar class-action suit against State Farm last year in which the jury found that State Farm had overcharged its customers for 23 years. A federal jury in that case awarded $34 million to about 24,000 current and former policyholders in Missouri, Law 360 reported.
Kansas City Life ended the first quarter with $130 million in revenue and netted about $4 million That’s up from $109 million in revenue and $1.46 million in net income for the same period last year, according to the company’s income statement.