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HPS Attorneys File Federal Case Against Life Insurance Company for Canceling Ailing Man’s Policy

On Behalf of | May 15, 2024 | Firm News

HPS Law Firm Partners Scott Heidepriem, Matthew Tysdal, and Pete Heidepriem filed a federal lawsuit against a life insurance company claiming it wrongly canceled the life insurance policy of Donald Hofer.  The Dakota Scout published an article on the case, which can be found at this link.  Below are excerpts of the article:

A Turner County woman is accusing a New York insurance company of revoking her ailing father’s life insurance policy after the family had spent decades paying premiums on the policy.

Brandy Lima of Marion is suing Equitable Financial Life Insurance Co. along with her mother, Marjorie Hofer of Freeman. They are representing Donald Hofer, Marjorie’s husband.

In 1989, Donald Freeman bought a life insurance policy from Equitable, and made monthly premium payments, the lawsuit says. In 2013, Donald was diagnosed with dementia and began receiving care in a nursing home.

Lima became the owner of the policy in 2021. Donald was still the insured and her mother was named as the beneficiary.

Each month, Lima paid $575 for the insurance policy, in excess of the monthly bill of $560.62. The payments came out of her checking account automatically and were reflected in monthly statements that Equitable sent to Lima’s home address, as well as annual reports.

In August of 2023, Lima noticed that a payment had not been made to Equitable. When she called to inquire why, she was told that the policy had been canceled because Lima had not paid an increase in the policy’s premium.

Lima asserts in the lawsuit that she never received notice of the premium increase. Nor did she receive notice of a grace period for missed payments or notice that the policy had been canceled, despite the terms of the policy requiring those notifications.

Lima was told that Donald Hofer would need to reapply to get the coverage reinstated. Lima submitted two applications for reinstatement, but Equitable denied the applications deeming Donald as not medically qualified.

“Due to Equitable’s failure to adhere to the terms of the policy and wrongful refusal to reinstate the policy, Marjorie has suffered the loss of the death benefit for which her family has paid premiums for over 40 years, Donald has suffered the loss of the policy for which he paid premiums for over 40 years,” the lawsuit says.

Equitable did not immediately respond for comment. In its 2023 annual report, the company reported $1.7 billion in operation earnings. President and CEO Mark Pearson called 2023 a “special year” in the company’s “storied history,” which was founded in 1859.

“In our first five years as a publicly listed company, we met every target we laid out at the time of our IPO, held our first Investor Day, honored our commitments to clients and shared our growth strategy alongside new five-year financial targets,” Pearson wrote.

The lawsuit accuses the company of breach of contract for failing to notify Lima about the cancelation or grace period, bad faith and unjust enrichment for taking decades of premium payments.

“Equitable has provided nothing to plaintiffs and now has wrongly terminated the policy,” the lawsuit contends.