Life Settlement Class-Action Lawsuit Filed Against Life Partners

Dallas, TX: A class-action lawsuit has been filed in Ellis County on behalf of Texas investors who say Waco-based Life Partners Inc. charged excessive premiums on the company's so-called "life settlement" policies.

Life Partners, a subsidiary of the publicly traded Life Partners Holdings Inc, purchases life insurance policies from policyholders for the purpose of selling interests in those policies to groups of investors. Policyholders receive an immediate, but reduced, payment, while Life Partners' investors receive the full face value upon the policyholder's death. The purchase of such policies for investment purposes is commonly referred to as a "life settlement."

The most recent lawsuit involves "universal life insurance" policies, in which the original insured policyholder can pay a higher premium and thereby add to the cash value of the policy. But that does not hold true for investors who purchase the rights to the policies in the form of a life settlement. Investors only receive the face-value amount of the policy upon the death of the insured, whether they pay only the minimum required to prevent lapse of the policy or a greater amount.

According to the lawsuit, Life Partners authorized the payment of the higher premiums for its investors even though there was no corresponding benefit, and doing so hastened the depletion of the escrow funds that investors set aside to pay policy premiums. Once the escrow funds ran out, Life Partners demanded additional payments from investors, including lead plaintiff John Willingham.

The attorneys are asking the court to certify other Life Partners investors as a class because of the many people who, like Mr. Willingham, suffered through the mismanagement of their escrow accounts. The lawsuit, John Willingham v. Life Partners Inc., Cause No. 82640, was filed on April 8 in Ellis County's 40th District Court.

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Last updated on Apr-26-11

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Life Partners Class Action

Dallas, TX: Waco-based financial company Life Partners did not play fair with investors and is guilty of both breach of contract and breach of fiduciary duty, according to a class-action suit filed by Dallas attorney James Craig Orr from the firm of Heygood, Orr & Pearson. If the allegations prove true, hundreds of people who bought something called "life settlements" investments from the company are likely owed thousands and thousands of dollars [READ MORE]

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