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Zurich Direct Life Insurance Class Action Lawsuit

Written by Nickel - 36 Comments

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My wife and I just received word today that Zurich Direct Life Insurance Company has recently settled a class action lawsuit, and we’re eligible for a piece of the settlement. Hurray! It’s our ticket to early retirement and life on easy street. Or is it?

The packet of information that we received leads off with this passage, explaining why we received the notice…

You received this notice because Zurich Life Insurance Company of America, now known as Chase Insurance Life Company (“Zurich Life”) records show that you are a member of a class of policyholders who will be affected by the nationwide settlement of a class-action lawsuit. The Court has given its preliminary approval to the Settlement, and has ordered that this Notice be sent to you and all other Class Members so that you may consider your options.”

Our options include remaining a member of the Class and receiving benefits of the settlement, removing ourselves from the Class, and staying in the Class, but objecting to the Settlement.

So what did Zurich Life do, and what are they offering in terms of reparations? In short, the Class Members alleged that policy holders who paid their premiums monthly, quarterly, or semi-annually paid more per year than those that paid annually even though such disparities were not allowed in the language of the policy, and further that Zurich did not disclose the magnitude of this “Dollar Difference.” The Class Members also alleged that Zurich should have presented this rate differential in terms of an APR.

This actually isn’t all that unorthodox — many companies (insurance or otherwise) charge different rates depending on the frequency of your payment… Pay for a longer term, get a better price. So where’s the problem? In fact, Zurich argued that all policyholders paid only those premiums that they agreed to, and that the rates are clearly set forth in the policy. They further stated that the Dollar Difference should have been apparent to its policyholders (I have to agree with them here…

I’m not terribly sympathetic toward people who get “ripped off” because they can’t figure out the different between two smallish numbers. Here’s an example: Pay monthly and your rate is $10/month, or pay yearly at $100/year — do you really need someone to spell out the difference for you?

Zurich further claimed that it would be inappropriate to characterize the premium differences as having an APR since insurance premiums are not a debt. I’m less convinced on this point, as you’re essentially financing your policy when you opt to pay monthly instead of paying the full year in advance. But here again, I’m not terribly sympathetic to the Class Members (even though I’m apparently one of them).

Regardless of their claims of innocence, however, Zurich Life has agreed to pay $7,145,007.25 to resolve the claim. Once the lawyers get their cut (they’re asking for 30%), the remainder will be divided up amongst Class Members in proportion to the Dollar Difference that they incurred during the period March 1, 1997 through August 31, 2005.

To be honest, I can’t recall ever having paid our premiums any way other than via annual payments, but who am I to argue with them? We had our Zurich Life policies for a few years before we switched to John Hancock Life Insurance, which we ultimately cancelled last fall after jumping into our most recent round of shopping for term life insurance (we’re currently insured through Lincoln Financial). I have no idea what we’ll ultimately receive in terms of the settlement, but I’m willing to bet that it’s not very much.

Okay, back to the settlement. On the surface, it seems a bit odd that Zurich Life would settle given the circumstances. That being said, I’m obviously not privy to the details of the case. On top of this, they were almost certainly looking at their risk when they made this decision (they’re an insurance company, after all!). As it turns out, the total Dollar Difference summed across all policyholders during the time period in question (and hence the amount they could’ve gotten nailed for) comes to a cool $27.2 million. Ouch. Suddenly $7.1 million doesn’t look so bad.

Published on July 19th, 2006 - 36 Comments
Filed under: Insurance

About the author: is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

Comments (scroll down to add your own):

  1. Ahhhh, yes. I received the exact same notice. I totally agree with you about your lack of sympathy for “the class”. This seems to be very common practice in the insurance world. I know if I pay my car insurance more often than annually, it costs me a bit more.

    So, it sounds like you are opting for “do nothing” (meaning collect your share of the settlement)? Me too! Who am I to turn away a legal freebie?

    Comment by Anonymous — Jul 19th 2006 @ 7:02 pm
  2. Yes, I’ll probably just do nothing, although I should try to get them our new address — it somehow got forward from the place before last, which we moved out of four years ago. I guess that our most recent move re-activated all of our past forwarding from previous moves???

    Comment by Nickel — Jul 19th 2006 @ 9:44 pm
  3. Has anybody got any recent updates on this subject.Im part of the class an need to know some more information.


    Comment by Anonymous — Sep 22nd 2006 @ 11:13 am
  4. Since this seem to be an active topic.I recevied one the statements in the mail too about it too.How much is each one of us going to get when the checks are if issued out.

    Comment by Anonymous — Sep 23rd 2006 @ 10:00 am
  5. OK I just got word that the settlement is almost approved.Can Anybody help me out to seeing that this matter is true.

    Comment by Anonymous — Sep 27th 2006 @ 11:47 am
  6. I’m sorry, but I’ve lost track of this and thus can’t offer any further insight.

    Comment by Nickel — Sep 27th 2006 @ 11:56 am
  7. What is status of payment? When will they be mailed? Who can we call?

    Comment by Anonymous — Oct 19th 2006 @ 10:45 pm
  8. Does anyone know when the payments will be mailed and how they figure the amount? Is there a website to get information?

    Comment by Anonymous — Oct 25th 2006 @ 12:57 pm
  9. Anyone have any info on status? Website? I can’t locate any type information.

    Comment by Anonymous — Oct 25th 2006 @ 5:58 pm
  10. Like I said in a previous comment, I’ve lost track of this. I also just did a quick Google news search and didn’t turn up anything.

    Comment by Nickel — Oct 25th 2006 @ 9:25 pm
  11. Well I have to admit I am curious as to when we are notifed again……if at all. Curious as to amount of check…….not proud…will accept anything…….actually, it’s not that I’m not proud, but HEY the Holidays are coming! AND I don’t have have alot of empathy for “big conglomerates”…please.

    Comment by Anonymous — Oct 27th 2006 @ 11:33 am
  12. It looks like there are about 283,000 people to devide up the settlement (after the lawyers fees). Deduct the expenses inccured to distribute the money and everyone will be lucky to receive a check for $50.00. Yes, you read correctly… a woopping fifty bucks. Breakfast and tip at the IHOP or half a tank of fuel for that SUV. LOL (Zurich is Laughing Out Loud)

    Comment by Anonymous — Nov 6th 2006 @ 3:40 pm
  13. Incorrect. Payments vary by policyholder.

    Comment by Anonymous — Nov 10th 2006 @ 2:43 pm
  14. Well, I am waiting on my checks because I was a policy holder and my husband.I got this number of the website on an attorney for the class John Eaves and Karen Mendenhall 505-888-4300 or Dennis McCray 505-792-1664.

    Comment by Anonymous — Nov 13th 2006 @ 10:54 am
  15. Hey! Guys checks are to mailed out on December 15th. Take a look at the website

    Comment by Anonymous — Dec 8th 2006 @ 7:49 pm

    Comment by Anonymous — Jan 3rd 2007 @ 9:02 pm
  17. Hello, I have amount deducted out of my checking account to pay for my insurance premium. I have notice that it is no longer Zurich Direct, but Chase. I did not receive a notice of the change. Why was I not contacted or receive a new policy with the new insurance companies name that has taken over? I now notice that another company has replace Chase which shows up on my statement named POLPREM-CILC. WHo is this insurance company. Still I have not received a notice. Upon reading and scrolling the webpage, I learned that there was a class action suit. May someone please contact me to let me know what is going on. Thank you,

    Vanessa Jefferson

    Comment by Anonymous — Mar 25th 2007 @ 11:09 pm
  18. Vanessa,
    I was just researching the same thing about POLPREM-CILC, and can’t seem to find anything – keep this post alive, and let us know if you find anything and we will do the same.

    Comment by Anonymous — Mar 29th 2007 @ 7:14 am
  19. Chase Insurance change their life insurance title to Protective Life Insurance. Chase number is 1800-321-9313. This is okay. Polprem stands for policy premium. Please give them a call to double check.


    Comment by Anonymous — Apr 2nd 2007 @ 3:35 pm
  20. I wonder if I can cash that check, can anyone give me a clear answer? thanks!!

    Comment by Anonymous — Apr 19th 2007 @ 9:26 am
  21. Your settlement check? Why wouldn’t you be able to cash it?

    Comment by Nickel — Apr 19th 2007 @ 10:12 am
  22. Been trying to locate Zurich Direct LIfe Insurance, as my term expires this year. Every 800 number that I have has either been disconnected or is a different company. Also, we never received notification of any class-action lawsuits. Any suggestions?

    Comment by Anonymous — May 7th 2007 @ 1:51 pm
  23. I have the same concerns as Mr hendersen; no notification of the lawsuit and my experation. Please help by providing a place to go or a number to call.

    Comment by Anonymous — May 11th 2007 @ 5:13 pm
  24. Anything to do with Chase or Zurich is wrong. I fought them for 2 years. I am a widow at 33 and my husband who was only 33 died in my arms from small cell lung cancer.
    When it came to pay out they didn’t. The policy was 100,000 I ended up with 32,000 before I paid my lawyer that 30%. They did the physical they did the blood tests he passed with flying colors. After the policy was in effect he got sick. They claimed he must of been sick before. He wasn’t and I did prove that. But it didn’t matter. They gave me the fight of my life, and now the house my husband worked so hard to build..I might lose. They are a multi million dollar company and it would not of hurt their business to pay that policy.It hurts us more than it will ever hurt them. They don’t care about the little people. They only care about collecting premiums.

    Comment by Anonymous — May 18th 2008 @ 4:48 pm
  25. I and my wife received the same notice about a settlement and even though we are not expecting much, not one penny has come our way.

    Comment by Anonymous — Sep 17th 2008 @ 5:24 pm

    Comment by Anonymous — Dec 17th 2008 @ 4:07 pm
  27. Please help, I too was never notified & have had 3 policies for years. March 12, 2009

    Comment by Anonymous — Mar 12th 2009 @ 5:52 pm
  28. Hi everyone I too never received any notice or anything , not even that their was a class action suit against them and I have had insurance with them since 2000.

    Comment by Anonymous — Mar 18th 2009 @ 12:39 pm
  29. I received a notice of Class Action & Settlement involving Chase (Zurich) Insurance Company several years ago, case # CV 2003-01471, and have heard nothing since, nor have I received any settlement money that the notice states would come by first class mail. Who can I contact about this?

    Comment by Anonymous — Feb 16th 2010 @ 1:58 pm
  30. i had a policy with them too,i had flood insurance,they sent me a letter and told me i were in the law suit,but i haven’t heard anything. its been since last year 66 moths or more someone plze give me up date about the checks or something,,,

    Comment by Anonymous — Mar 10th 2010 @ 2:29 am
  31. I have not received any additional information either nor have I received a check. Yesterday I wrote to the judge in New Mexico who handled the class action case in hopes of getting some information. I’ll keep you posted IF there is any response.

    Comment by Anonymous — Mar 10th 2010 @ 12:31 pm
  32. Hi Don;
    Please keep me informed as I have not recieved any info either. Nor have I recieved any money, so when do you think we will be getting our 1.00 from the settlement.

    Comment by Anonymous — Mar 10th 2010 @ 2:20 pm
  33. Hi Lois:
    If insurance companies were non profit (because having insurance is a public necessity) we would have had our settlement by now. On another subject, remember when Blue Cross and other health insurers were non profit? Health care was affordable, well managed and offered good coverage then. Once these insurers became corporatized “for profit” monsters our health care system went into the toilet.


    Comment by Anonymous — Mar 11th 2010 @ 12:29 pm
  34. yes i to need help i just now found out i no longer have zurich ins. ive been paying since 2004 it come out of my bank each month so who iam i paying and how do i stop it

    Comment by Anonymous — May 4th 2010 @ 12:06 pm
  35. If you Google “Protective Life Insurance Co.-Nashville, TN,” and then click on “Kemper, Zurich, Fidelity, Chase Life Insurance phone contact info” you will get the best idea of where you stand and who to call. You are probably the same as myself and are paying Protective Life in Nashville, TN and have a policy number that starts with ZL. Their address is P.O. Box 305031 and the Zip is 37230-5031. Phone is 1-800-321-9313. Hope this helps.

    Comment by Anonymous — May 4th 2010 @ 2:03 pm
  36. I contacted Rust Consulting, Inc. re: Case No. CV 2003-01471, which is the Mills vs Zurich Direct settlement. I was informed that I did receive a check for $22.39 in Dec. 2006. I guess I don’t remember it, but it is possible it happened. He even gave me the check number. If you have the same concerns that I had, contact [email protected].

    Comment by Anonymous — May 7th 2010 @ 2:10 pm

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