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Florida Residents Sue Prudential for Fraud

Wed, 01/31/2001 - 1:00am — Karen Stevenson
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Insure.com reports that 15 Palm Beach County, Fla., residents went to court on Jan. 22, 2001, charging Prudential Insurance Co. with fraud and racketeering and seeking $1 billion in damages. They are charging Prudential with questionable sales tactics targeted at elderly residents, including a "vanishing premium" scheme, in which an agent claims a life insurance policy's cash value will perform so well that the buyer can stop paying premiums within a certain number of years, and avoiding the term "insurance" to sell cash value life insurance policies as "personal pension plans." The plaintiffs in the case all opted out of a class action lawsuit against Prudential that the company settled in 1996 for more than $2 billion.

Insure.com reports that 15 Palm Beach County, Fla., residents went to court on Jan. 22, 2001, charging Prudential Insurance Co. with fraud and racketeering and seeking $1 billion in damages. They are charging Prudential with questionable sales tactics targeted at elderly residents, including a "vanishing premium" scheme, in which an agent claims a life insurance policy's cash value will perform so well that the buyer can stop paying premiums within a certain number of years, and avoiding the term "insurance" to sell cash value life insurance policies as "personal pension plans." The plaintiffs in the case all opted out of a class action lawsuit against Prudential that the company settled in 1996 for more than $2 billion.