About 5,700 Washington buyers of “vanishing premium” policies from Phoenix Home Life Mutual Insurance Co. may benefit from a proposed class-action settlement, state commissioner Deborah Senn said Monday.
The $100 million settlement reached Aug. 13 in a New York court resolves a dispute over policies sold by the Hartford, Conn.-based insurer to 600,000 people nationwide.
The number of Idaho policyholders was not available.
Consumers bought universal life policies from Phoenix in the 1980s when premiums could be invested with double-digit interest rates. Interest income was supposed to generate enough money to cover the cost of the insurance, fulfilling the promise of “vanishing premiums.” However, rates fell and policyholders had to keep paying the premiums.
Under the settlement, Phoenix Home Life policyholders may apply for restitution, including low-interest loans, cash contributions to the policy, or reimbursement in mutual fund shares.
Policyholders can call Phoenix Home Life at 1-800-556-8533.
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