Life Insurance Companies And Big Tax Breaks

Did you know that Insurers Play State Insurance Regulators? Here’s what you need to know about Life Insurance Companies and Big Tax Breaks.

When you think of a life insurance company, you expect it to be conservative, even old-fashioned, but definitely doing nothing too edgy.  The most important thing for a life insurance company should be to have sufficient money on hand (called reserves in the insurance world) to pay even an unusually high year of policy benefit payouts.  The security of a life insurance policy comes in large part from expecting the company to be solid, and there to help, if, unfortunately, your loved one passes away.  The life insurance companies know this; that is why most of their advertising is about their long time in business, how they care about you and your family, and how they will be there when you need them.  They spend more than a billion dollars annually just on domestic advertising (including all forms) to get you to believe this.

But the reality is that the insurance companies are playing the state regulators off against each other, trying to see which will permit the companies to retain really low reserves?  Even more, when one of these companies releases their reserves, going from a high to low reserve, that money is usually taxed – which is fair.

The company is moving money from being held by the company, to being paid by the company, to its executives and stockholders.  For an example of Life Insurance Companies and Big Tax Breaks, Transamerica life insurance used this technique to move $1.8 billion off its books recently.

The life insurance company’s game plan is simple: move big money out of the safe reserves, into the company’s general revenues, available for payment of executive bonuses and increased salaries.  

Usually, the money would be counted as income for the company when it moves out of reserves, which is to be paid to executives – but,  state insurance regulators report the reserve levels as unchanged.  Federal law states that reductions in reserves are treated as taxable income,  but because the complex plan on paper appears that the reserves have remained the same, the insurers do not pay any federal tax.  The maneuvers are sometimes known as “shadow insurance.”  The financial regulator in New York, Benjamin Lawsky, has been calling some these transactions “financial alchemy” because they seem to make money appear out of nowhere.

These transactions are modeled after reinsurance, a business in which an insurer pays another company to take over some of the obligations to pay claims.  Reinsurance is widely used and is considered beneficial, because it allows insurers to spread their risks evenly and remain stable as they grow.  The obligations fall off the original insurer’s books because the reinsurer has picked them up.

In the “shadow version” life insurance companies created wholly owned subsidiaries, sometimes called captives, which they use as a reinsurance company, to move their obligation to the subsidiary.  So, then the parent insurance company removes the obligations off their books, even though the “reinsurance companies” here are really just part of the insurance company.  Those “shadow companies” are not really separate companies.

Iowa, at this time, appears to have the state of the art statutes and regulations, which permit this shadow insurance.  This has helped encourage more life insurance companies to move to Iowa – and, as an added benefit, reserves are tax-deductible as an ordinary business expense. So, thanks to the regulations being influenced by the life insurance companies, they get to keep their large tax-deduction, avoid paying taxes on the money moved out of reserves, and don’t have to increase their reserves.  It really does make a difference who you know.

While this is complex, and your concern about your life insurance policy may be much different, this shows an important lesson: The insurance companies will use complex regulations to try to give themselves every advantage, even when their action makes no independent business sense.

Because a life insurance company can be only concerned with their own profits, you need an experienced life insurance lawyer now to help get your policy paid.

Mutual Of Omaha Life Insurance Company

United Mutual of Omaha Life Insurance Company has a marketing emphasis on smaller, lower premium policies.

Those policies are described by United of Omaha Life Insurance Company as:

“A Whole Life Guaranteed policy from United of Omaha Life Insurance Company (United of Omaha) helps ensure that your family may be supported in the future.

An insurance policy from United Mutual of Omaha Life Insurance Company helps provide financial protection to those who depend on your assistance every day. Benefit payouts can help fund costs such as daily expenses, unforseen accidents, and education funds.

A Whole Life Guaranteed insurance policy offers: Up to $25,000 in coverage, Guaranteed coverage for those aged 45-85, No medical exam or health questions, No decrease in benefits or increase in premiums, Builds cash value to borrow against, A Whole Life Guaranteed policy also includes a graded death benefit. If death occurs from natural causes (not accidental) during the policy’s first two years, the beneficiary will receive all premiums you paid plus 20 percent. Once the two year period ends, the beneficiary will receive the policy’s full benefit.”

However, some parts of what Mutual of Omaha says in that presentation are not exactly right.  They do not have policies that are without medical questions.  Always, the medical history portion of the application is what Mutual of Omaha will rely upon for rescission, if there is a claim within the first two years of the application.  They will not ever simply give up that right.

Are You A Beneficiary In A Mutual Of Omaha Life Insurance Company Claim?

This is a new, more aggressive sales move of life insurance company – as no longer does Mutual of Omaha even want to just have the rescission laws on its side.  Under those laws, in California, the insurance company that seeks to rescind a policy needs to affirmatively bear the burden of finding material evidence to justify its actions.  Instead of following that law, Mutual of Omaha seeks to eliminate the insurance in the first two years of the policy. By writing a life insurance policy that does not provide any life insurance coverage in the first two years, the policy is, in our opinion, inherently misleading, and not an insurance policy at all.

Mutual of Omaha Sells Life Insurance, Then Claims it isn’t Life Insurance for the First Two Years.

Even Wikipedia features a section of the numerous verdicts against Mutual of Omaha for bad faith, unfair dealing, breach of contract, and claims denials.

Have you suffered the unexpected loss of a loved one, only to have a claim for life insurance benefits delayed, or denied?  Do you get the feeling that the life insurance company is doing everything it can to avoid paying the claim?  Has the life insurance company sent you a letter stating that they are rescinding the policy, making a rescission, or just sending back the premiums paid? Especially if your loved one had the policy for less than two years before passing away, the life insurance company can become very aggressive at seeking to avoid the policy payment.  Rescission is a favored strategy of the life insurance company, if the policy was issued less than two years before the death.

We can help.  Call LifeInsuranceLawyerNOW.com at (888) 997-4070, or (818) 937-0937, or send an email to us in the form on the side of the screen.  We are highly experienced lawyers, not paralegals, and we know this area.  We get right to it with you and the insurance company, and get many claims paid right away.  If court is necessary, we are regular Federal litigators and will push the life insurance company hard for the well being of you and your family.  We respect you, deal directly with you, and understand not only the law and facts, but what you are going through.  We are here to help.  Contact us as soon as possible, to get your claim paid faster.

Transamerica Life Insurance Company

Transamerica Life Insurance Company, or The Transamerica Corporation is an American holding company for various life insurance companies and investment firms doing business primarily in the United States, offering life and supplemental health insurance, investments, and retirement services.

Are You A Beneficiary In A Transamerica Life Insurance Company Claim?

Transamerica,  “sells the full line of life insurance policies, including additional policies that are specifically for final expenses, including medical bills and burial, and long term care policies.  Transamerica sells term life insurance policies with benefits as low as $25,000 and variable universal life insurance with benefits of $100,000 per year.  For the whole life insurance policies, which have an investment tool aspect, there is no limit to the amount of coverage that can be purchased.  Final expense life policies are limited to $50,000 and say “no medical exam” but there are health underwriting questions involved.  It really is something that depends on your specific facts, and we are here to help.”

However, just have a look at this bad faith and breach of contract case – Transamerica pays $195 million to settle suit over Universal Life Insurance.

Also: Carmen Clemons v. Transamerica Premier Life Insurance Company, San Bernardino Superior Court Case No. CIVDS1702068 (filed February 6, 2017)
In 2011 Defendant Transamerica issued a life insurance policy to plaintiff insuring the life of her husband. The insured failed to make the required premium payment in 2013 and the policy was cancelled on December 7, 2013. The insured passed away on March 20, 2015. Thereafter, plaintiff submitted a claim for death benefits. Defendant Transamerica conducted a review of its 2013 cancellation of the policy and denied plaintiff’s claim for benefits. Plaintiff contended that Defendant Transamerica did not abide by Insurance Code Sections 10113.71 and 10113.72 when it initially lapsed the policy, making the lapse void. 

Have you suffered the unexpected loss of a loved one, only to have a claim for life insurance benefits delayed, or denied? 

Do you get the feeling that the life insurance company is doing everything it can to avoid paying the claim?  Has the life insurance company sent you a letter stating that they are rescinding the policy, making a rescission, or just sending back the premiums paid? Especially if your loved one had the policy for less than two years before passing away, the life insurance company can become very aggressive at seeking to avoid the policy payment.  Rescission is a favored strategy of the life insurance company, if the policy was issued less than two years before the death.

We can help.  Call LifeInsuranceLawyerNOW.com at (888) 997-4070, or (818) 937-0937, or send an email to us in the form on the side of the screen.  We are highly experienced lawyers, not paralegals, and we know this area.  We get right to it with you and the insurance company, and get many claims paid right away.  If court is necessary, we are regular Federal litigators and will push the life insurance company hard for the well being of you and your family.  We respect you, deal directly with you, and understand not only the law and facts, but what you are going through.  We are here to help.  Contact us as soon as possible, to get your claim paid faster.

John Hancock Life Insurance Company

John Hancock Life Insurance Company is a company that vigorously markets its name, associating it with a founding father to gain your trust.

John Hancock Life Insurance Company says: “With a proud history of more than 150 years, John Hancock empowers people to feel confident about the future by providing innovative insurance products that protect their loved ones, grow their savings, and preserve their wealth. provides solutions to more than 3.5 million policyholders, Delivers on its promises with over $2.3 billion in claims paid annually, has financial strength ratings that are among the highest in the industry, offers a wide range of products through an extensive network of agents, brokers and financial planners across the U.S.”

Are You A Beneficiary In A Claim With John Hancock Life Insurance Company?

John Hancock life insurance company seeks to market itself by saying how it is unique:

“Our solid foundation of financial strength and stability positions us well to deliver on our promises now and well into the future…. John Hancock’s innovative life insurance product portfolio is among the best in the industry. And when combined with our underwriting expertise and service excellence, you can feel confident that you have the resources needed to help secure your future. …We’ve also made doing business with John Hancock easy and convenient for you. Our products are widely available through a variety of financial institutions supported by an extensive network of financial professionals who can help evaluate your goals and choose a life insurance product that’s right for you.”

Here’s a recent class action suit against John Hancock:

“John Hancock Life Insurance Co. has agreed to pay $91.25 million to settle a class action lawsuit accusing the company of using improper mortality rate calculations that caused consumers to pay inflated rates.

On Friday, plaintiff 37 Besen Parkway LLC filed a memorandum supporting its motion for preliminary approval of the John Hancock class action settlement.

‘The $91.25 million settlement fund will be used to compensate tens of thousands of elderly insureds, and is a remarkable result for an alleged breach of a contractual promise that this Court had preliminary concerns about being ‘awfully vague’ and ‘almost sounds illusory,’’the plaintiff says in the memorandum.”

Have you suffered the unexpected loss of a loved one, only to have a claim for life insurance benefits delayed, or denied? 

Do you get the feeling that the life insurance company is doing everything it can to avoid paying the claim?  Has the life insurance company sent you a letter stating that they are rescinding the policy, making a rescission, or just sending back the premiums paid? Especially if your loved one had the policy for less than two years before passing away, the life insurance company can become very aggressive at seeking to avoid the policy payment.  Rescission is a favored strategy of the life insurance company, if the policy was issued less than two years before the death.

We can help.  Call LifeInsuranceLawyerNOW.com at (888) 997-4070, or (818) 937-0937, or send an email to us in the form on the side of the screen.  We are highly experienced lawyers, not paralegals, and we know this area.  We get right to it with you and the insurance company, and get many claims paid right away.  If court is necessary, we are regular Federal litigators and will push the life insurance company hard for the well being of you and your family.  We respect you, deal directly with you, and understand not only the law and facts, but what you are going through.  We are here to help.  Contact us as soon as possible, to get your claim paid faster.

Cigna Life Insurance Company

Cigna Life Insurance Company is not only a huge life insurance company, but a huge health insurance company as well.

Cigna sells individual whole life insurance, selling it as a “final expenses” policy, with benefits to $25,000.  Cigna seeks to sidestep the rescission law, by making its policies cover life insurance only after the first two years have passed; before that, the “insurance” is only for the amount of the premiums.

Cigna also sells “accidental” life insurance, which is a very narrow product, which only covers death caused by accident – so, any unforseen illness is something not covered.  These policies confuse many people into thinking they have a life insurance policy, that provides some family security when it only actually provides coverage against accidental death, not the many other more common sad ways that death occurs.  These policies may be “more affordable than you think” because you are thinking you get a real full life insurance policy, but you are not.

Here’s some interesting news regarding Cigna – Texas Hospital Partially Wins $50M ERISA Lawsuit Against Cigna.

• “Cigna violated ERISA by denying full benefit payments to out-of-network provider that engaged in fee-forgiving practice
• Decision follows a $13.6 million judgment against Cigna in a similar case involving another Texas hospital”

Have you suffered the unexpected loss of a loved one, only to have a claim for life insurance benefits delayed, or denied?  Do you get the feeling that the life insurance company is doing everything it can to avoid paying the claim?  Has the life insurance company sent you a letter stating that they are rescinding the policy, making a rescission, or just sending back the premiums paid? Especially if your loved one had the policy for less than two years before passing away, the life insurance company can become very aggressive at seeking to avoid the policy payment.  Rescission is a favored strategy of the life insurance company, if the policy was issued less than two years before the death.

We can help.  Call LifeInsuranceLawyerNOW.com at (888) 997-4070, or (818) 937-0937, or send an email to us in the form on the side of the screen.  We are highly experienced lawyers, not paralegals, and we know this area.  We get right to it with you and the insurance company, and get many claims paid right away.  If court is necessary, we are regular Federal litigators and will push the life insurance company hard for the well being of you and your family.  We respect you, deal directly with you, and understand not only the law and facts, but what you are going through.  We are here to help.  Contact us as soon as possible, to get your claim paid faster.

AXA Equitable Life Insurance Company

AXA Equitable Life Insurance Company is among the largest life insurers in America.  The company traces its roots to 1859, and provides more than 2.50 million policies nationwide, through almost 5,000 financial representatives.  AXA is the US company of the Paris headquartered AXA company, an international heavyweight.

Are You A Beneficiary In A Claim With AXA Equitable Life Insurance Company?

AXA Equitable Life Insurance Company, as a world sized life insurance company, sells the full line of different life insurance policies.  Perhaps due to its international ownership, its huge size, and many different parts, AXA can be a very challenging company to work with on a life insurance claim.

The case Magaly Eagan et al v. AXA Equitable Life Insurance Company  shows a settlement of $2,500,000 concerning AXA and alleged benefit plan administrator violation, as well as pension ERISA violation.

Additionally, in Brach Family Foundation vs. AXA Equitable Life Insurance Company, AXA was sued for tremendous rate hikes of their elderly insured:

By focusing the increase on older aged insureds, the suit alleges AXA “unfairly targets the elderly who are out of options for replacing their insurance contracts” and forces the policyholders to either pay “exorbitant premiums that AXA knows would no longer justify the ultimate death benefits” or reduce the death benefit, lapse or surrender the policies.  According to the lawsuit, any of these actions will allow AXA to make a “huge” profit from the “extraordinary” COI increase.  According to the lawsuit, AXA originally projected that the COI increases, which ITM TwentyFirst has noted ranged from 25-72%, would increase “profits by approximately $500 million.”

Have you suffered the unexpected loss of a loved one, only to have a claim for life insurance benefits delayed, or denied? 

Do you get the feeling that the life insurance company is doing everything it can to avoid paying the claim?  Has the life insurance company sent you a letter stating that they are rescinding the policy, claiming Application Misrepresentation, or just sending back the premiums paid? Especially if your loved one had the policy for less than two years before passing away, the life insurance company can become very aggressive at seeking to avoid the policy payment.  Rescission is a favored strategy of the life insurance company, if the policy was issued less than two years before the death.

We can help.  Call LifeInsuranceLawyerNOW.com at (888) 997-4070, or (818) 937-0937, or send an email to us in the form on the side of the screen.  We are highly experienced lawyers, not paralegals, and we know this area.  We get right to it with you and the insurance company, and get many claims paid right away.  If court is necessary, we are regular Federal litigators and will push the life insurance company hard for the well being of you and your family.  We respect you, deal directly with you, and understand not only the law and facts, but what you are going through.  We are here to help.  Contact us as soon as possible, to get your claim paid faster.

Allstate Life Insurance Company

Allstate Life Insurance Company is very large life insurance company that sells through agents –  term life, permanent life, and whole life insurance products – and because Allstate sells through advertising to drive contacts to its agents, it is focused on a different part of the market.

Allstate is often referred to as one of the worst insurance companies to fight on a claim.  This may be due in part to its high costs, for pervasive advertising, and because selling through agents requires some agent payment.

Are You A Beneficiary In An Allstate Life Insurance Company Claim?

Allstate is in a very aggressive position to its policyholders.  Some former employees have reported: “According to CEO Thomas Wilson, Allstate’s mission is clear: ‘our obligation is to earn a return for our shareholders.‘” Unfortunately, that dedication to shareholders has come at the expense of policyholders. The company that publicly touts its “good hands” approach privately instructs agents to employ a “boxing gloves” strategy against its own policyholders.

In the words of former Allstate adjuster Jo Ann Katzman, “We were told to lie by our supervisors – it’s tough to look at people and know you’re lying.”  (Recent AAJ report).

In cases like these, and countless others, the name of the game is deny, delay, defend – do anything, in fact, to avoid paying claims. For companies like Allstate, there are corporate training manuals explaining how to avoid payments, portable fridges awarded to adjusters who deny the most claims, and pizza for parties to shred documents.

Allstate liable for $22 million to insured party for bad faith in Hennessy v. Allstate Insurance – this is what can happen when a company delays and denies claims.However, you must realize that it takes the skill and relentlessness of an experienced, expert lawyer like us to get a verdict like this.

Have you suffered the unexpected loss of a loved one, only to have a claim for life insurance benefits delayed, or denied? 

Do you get the feeling that the life insurance company is doing everything it can to avoid paying the claim?  Has the life insurance company sent you a letter stating that they are rescinding the policy, making a rescission, or just sending back the premiums paid? Especially if your loved one had the policy for less than two years before passing away, the life insurance company can become very aggressive at seeking to avoid the policy payment.  Rescission is a favored strategy of the life insurance company, if the policy was issued less than two years before the death.

We can help.  Call LifeInsuranceLawyerNOW.com at (888) 997-4070, or (818) 937-0937, or send an email to us in the form on the side of the screen.  We are highly experienced lawyers, not paralegals, and we know this area.  We get right to it with you and the insurance company, and get many claims paid right away.  If court is necessary, we are regular Federal litigators and will push the life insurance company hard for the well being of you and your family.  We respect you, deal directly with you, and understand not only the law and facts, but what you are going through.  We are here to help.  Contact us as soon as possible, to get your claim paid faster.

Prudential Life Insurance

Prudential Insurance Company sells insurance and annuities through The Prudential Insurance Company of America, Pruco Life Insurance Company, and Pruco Life Insurance Company of New Jersey.

Each is a Prudential Financial company located in Newark, NJ, and each is solely responsible for its own financial condition and contractual obligations.

Prudential is a very large company, where many policyholders have no issues, while others have serious problems.  The result really depends on the facts presented to the company, and the company’s reaction to those facts.

Prudential Lined its Own Pockets from the Deaths of Our Own Military Servicemen and Women!

“Prudential Insurance Co. of America has agreed to pay $39.2 million to settle a class action lawsuit alleging it failed to pay death benefits to military service members, veterans and family members under a group life insurance policy in a lump sum as required by federal law.

The $39.2 million settlement was in a class action alleging that Prudential Insurance Co. of America failed to pay death benefits to military service members, veterans, and their families in a lump sum as required by federal law – and,  therein the lawsuit, Prudential had settled the death benefits through the establishment of an interest-bearing retained asset account (Alliance Account) for each beneficiary and, because of this, “systematically lined its own pockets with interest earnings accrued on lump sum insurance benefits owed to families of deceased service members and veterans” .

Are You A Beneficiary In A Prudential Life Insurance Company Claim?

Have you suffered the unexpected loss of a loved one, only to have a claim for life insurance benefits delayed, or denied? 

Do you get the feeling that the life insurance company is doing everything it can to avoid paying the claim?  Has the life insurance company sent you a letter stating that they are rescinding the policy, claiming Application Misrepresentation, or just sending back the premiums paid? Especially if your loved one had the policy for less than two years before passing away, the life insurance company can become very aggressive at seeking to avoid the policy payment.  Rescission is a favored strategy of the life insurance company, if the policy was issued less than two years before the death.

We can help.  Call LifeInsuranceLawyerNOW.com at (888) 997-4070, or (818) 937-0937, or send an email to us in the form on the side of the screen.  We are highly experienced lawyers, not paralegals, and we know this area.  We get right to it with you and the insurance company, and get many claims paid right away.  If court is necessary, we are regular Federal litigators and will push the life insurance company hard for the well being of you and your family.  We respect you, deal directly with you, and understand not only the law and facts, but what you are going through.  We are here to help.  Contact us as soon as possible, to get your claim paid faster.

American General Life Insurance Company

American General Life Insurance Company is very aggressive at selling policies.  American General Life Insurance Company is part of AIG Direct Life Insurance, known as AIG Direct.

American General Life Insurance Company does not work through agents, but is a company that has direct contact with its customers.  American General is more than one hundred years old, and offers a very simple and direct interface to obtaining lower benefit policies, which are very important to the customers.

Are You A Beneficiary In An American General Life Insurance Company Claim?

In Rhodes v. AIG Domestic Claims, Inc., the plaintiffs were awarded $9.412 million, wherein the judge determined that AIGDC wilfully and knowingly violated its duty to effectuate a prompt and fair settlement after the jury verdict in the tort case, characterizing AIGDC’s December, 2004, postjudgment settlement offer of $7 million in response to the plaintiffs’ c. 93A demand letter as “not only unreasonable, but insulting.” 

Have you suffered the unexpected loss of a loved one, only to have a claim for life insurance benefits delayed, or denied? 

Do you get the feeling that the life insurance company is doing everything it can to avoid paying the claim?  Has the life insurance company sent you a letter stating that they are rescinding the policy, claiming Application Misrepresentation, or just sending back the premiums paid? Especially if your loved one had the policy for less than two years before passing away, the life insurance company can become very aggressive at seeking to avoid the policy payment.  Rescission is a favored strategy of the life insurance company, if the policy was issued less than two years before the death.

We can help.  Call LifeInsuranceLawyerNOW.com at (888) 997-4070, or (818) 937-0937, or send an email to us in the form on the side of the screen.  We are highly experienced lawyers, not paralegals, and we know this area.  We get right to it with you and the insurance company, and get many claims paid right away.  If court is necessary, we are regular Federal litigators and will push the life insurance company hard for the well being of you and your family.  We respect you, deal directly with you, and understand not only the law and facts, but what you are going through.  We are here to help.  Contact us as soon as possible, to get your claim paid faster.