01.16.25

Federal Appeals Court Rules on How To Read a Life Insurance Policy

by: Allison Bell

The 8th U.S. Circuit Court of Appeals has issued a ruling that could affect how life insurers set cost-of-insurance charges for holders of universal life insurance policies. A three-judge panel issued the ruling in connection with Christopher Meek v. Kansas City Life Insurance Company, a class-action suit filed in 2019. In 2023, a federal district court judgment rejected Kansas City Life's reading of policy provisions that describe how the company will calculate the cost-of-insurance charges that the policyholders pay. The policies involved stated that cost-of-insurance charges would be based on "the insured's sex, age and risk class" and Kansas City Life's "expectations as to future mortality experience," according to an opinion by Circuit Judge David Stras. "Conspicuously missing is any mention of profits and expenses."

Read the full article on Think Advisor