Kansas City Life Insurance Company “systematically overcharged” customers for insurance and expenses, depleting cash values for possibly hundreds of policy owners, two law firms claimed in a federal lawsuit filed Tuesday.
Stueve Siegel Hanson LLP and Miller Schirger, LLC, claimed Kansas City Life made unauthorized charges that drained policy owners’ cash value over time from their permanent life insurance.
“Simply put,” the firms said in a statement Wednesday, “money that should go to the policy owner’s savings is going instead to the insurance company.”
In the case of the plaintiff, Christopher Meek of Baxter Springs, Kansas, he has paid the insurance company nearly $60,000 in premiums throughout more than 34 years. But his cash value in October 2018 was depleted to less than $500, according to the lawsuit.
The lawsuit, filed in the Western District of Missouri, claimed thousands of customers across the country have likely been affected by the alleged breach of contract. It could leave policy owners without life insurance “when it is needed the most,” the firm alleged in a statement.
A spokesperson for Kansas City Life said the company became aware of the lawsuit through media sources and had not “received service” from those involved in the lawsuit. It therefore could not comment as of Wednesday afternoon, the spokesperson said.
“What we can acknowledge is that for the past 124 years, we have ensured that the interests of our policyholders and the integrity of our company remain our highest priorities,” the company said in a statement.
In 2018, the law firms obtained a judgment of more than $34 million after they sued State Farm for similar overcharges on behalf of about 24,000 policy owners, according to federal court records.