‘Emergency Situation’: Illinois Mutual Cashes In by Canceling Lifelong Health Insurance Policies, Class Action Alleges

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A proposed class action alleges Illinois Mutual Life Insurance Company illegally canceled over 20 “renewable for life” insurance policies because it believed they were no longer profitable.

The 21-page case contends that Illinois Mutual breached its contractual promise to offer lifelong health insurance, a policy that guarantees continuous coverage for a policyholder’s life as long as premiums are paid. The lawsuit argues that Illinois Mutual terminated all remaining non-cancelable policies, for which the plaintiff and others who have “entered their golden years” had supposedly paid premiums for roughly 50 years, at the risk of consumers’ health because they was no longer profitable.

“Plaintiff and Class members lost health coverage in a time that they most need it, a time that no other insurance company would want to grant them an insurance policy without it costing a fortune because of their age and health,” the suit states.

According to the complaint, the Illinois Mutual lifelong health policy states that lifelong coverage is ensured so long as consumers pay a premium on time. The suit claims that Illinois Mutual did not obtain permission from the California Department of Insurance (CDI) before canceling the insurance policies. Per the complaint, the CDI’s long-term care insurance guide states that individual policies are guaranteed renewable and cannot be cancelled by the insurance company unless the premium is not paid on time, or due to an insured’s age or health.

The plaintiff initially purchased the policy when he resided in Michigan, but Illinois Mutual has accepted his consistent payments since he moved to California in 1976, the case asserts. Although Michigan has purportedly approved the cancellation of the plaintiff’s policy, California has not, the lawsuit states.

Per the complaint, an Illinois Mutual employee gave the plaintiff six months’ notice of the policy’s cancellation via email in April 2021. According to the email, the discontinuation was issued because only 30 individuals insured with the same policy were still alive, the suit relays.

The complaint stresses that the plaintiff has become ill in the past several years and urgently requires health coverage to receive treatment.

The case scathes that Illinois Mutual acted with “malice, oppression, fraud, and with despicable conduct in conscious disregard of the rights of [plaintiff],” who will now have to endure “the most hardship, possibly even death.”

The lawsuit looks to represent all consumers and distributors whose Illinois Mutual “renewable for life” health policy was canceled.

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