Texas court certifies class action against life settlement provider Life Partners, Inc.

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by Michael Heygood

A Dallas County district court has ordered that a lawsuit filed by Heygood, Orr & Pearson against Life Partners, Inc. may proceed as a class action. Life Partners, Inc. is one of the oldest and largest “life settlement” companies in the United States.

A life settlement is the sale of an existing life insurance policy to a third party for more than its cash surrender value, but less than its net death benefit. Life insurance policies are sold for many reasons—the policy owner may no longer need or want his or her policy, he or she may wish to purchase a different kind of life insurance policy, or premium payments may no longer be affordable. Purchasers make a cash payment to the policy owner and then pay premiums as necessary to keep the policy in effect. Upon the insured’s death, the purchasers receive the death benefit.

Heygood, Orr & Pearson filed this suit, McDermott v. Life Partners, Inc., Case No. 11-02966, on behalf of a person who had invested in a particular life settlement with Life Partners, Inc. The lawsuit alleges that Life Partners, Inc. overpaid insurance premiums on that life settlement policy, resulting in less money being paid to those who had invested in the policy when it matured. Heygood, Orr & Pearson have been designated as Class Counsel to represent the class members—others who invested in that same life settlement.

Heygood, Orr & Pearson has also filed other claims against Life Partners, Inc.—in state and federal court, in Texas and in California—on behalf of Life Partners, Inc. customers alleging that the company breached contractual and fiduciary duties owed to its customers. HOP is pursuing claims alleging that the company overpaid insurance premiums on life settlements as well as claims alleging that the company provided false “life expectancies” to customers.

Life Partners, Inc. is just one of many companies in the business of buying and selling “life settlements.” If you feel that a “life settlement” investment company may have taken advantage of you or a loved one, you need to determine what legal rights you may have. You can reach us by calling toll-free at 1-877-446-9001, or by filling out a free online contact form.