Class Action Claims John Hancock Failed to Send Yearly Notices in California, Caused Life Insurance Benefits to Lapse

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A proposed class action alleges John Hancock Life Insurance Company has “knowingly and repeatedly” violated California law by failing to provide policyholders with statutorily mandatory annual notices. John Hancock’s failure to do so has caused many policyholders’ benefits to lapse, which is to blame for the Massachusetts company’s refusal to pay out on some life insurance policies, the suit alleges.

The lawsuit says that sections 10113.71 and 10113.72 of California’s Insurance Code stipulate that life insurers such as John Hancock must give policyholders an opportunity every year to designate a third party to receive notice of a potential termination of benefits for non-payment of a premium. In essence, the law aims to provide consumers, especially seniors, with protection from losing life insurance coverage due to, say, accidentally missing a payment. The complaint stresses that when a consumer falls ill or nears the end of their life, it is “not uncommon” for a payment to be missed. 

John Hancock, the complaint alleges, has “repeatedly and intentionally” failed to not only provide mandatory yearly notice to policyholders of the option to designate a termination notice recipient but has refused to honor proposed class members’ life insurance policies and pay beneficiaries. The complaint claims the defendant’s conduct is “particularly egregious” in that John Hancock has had notice that a court in the same district in which the case was filed has enforced California’s life insurance notice laws.

According to the case, the plaintiff is one such beneficiary to whom John Hancock has refused to pay life insurance benefits. The woman claims the defendant improperly terminated the benefits linked to a $1,000,000 term life insurance policy issued to her husband, who passed away in October 2017. 

“John Hancock has chosen to disregard the Statutes with respect to life insurance policies it issued or delivered in California prior to January 1, 2013,” the complaint alleges.

The lawsuit looks to cover: 

“All beneficiaries who made a claim, or would have been eligible to make a claim, for the payment of benefits on life insurance policies renewed, issued or delivered by John Hancock Life Insurance Company (‘John Hancock’) in the State of California that lapsed or were terminated by John Hancock for the non-payment of premium after January 1, 2013, and as to which policies the notice or notices as described by Sections 10113.72(b) of the California Insurance Code (the Designation Notice Requirement’) were not sent by John Hancock prior to lapse or termination.”

The complaint is embedded below.