Des Moines, Iowa-based Principal Life Insurance Co. has settled for $374.2 million a class action lawsuit alleging its agents engaged in sales fraud.
The suit alleged that agents for Principal used misleading sales practices including a “vanishing premiums” scheme in which an agent convinces consumers that the policy’s cash value will perform well enough to make premium payments unnecessary after a few years.
Other charges included overstating the performance of cash value policies and annuities, selling insurance as an investment product and targeting senior citizens for annuity purchases.
Under the settlement, Principal will reimburse roughly one million current and former life insurance policy and annuities holders.
Topics Lawsuits
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