Alleman v. State Farm Life Insurance Co.
(3rd Cir. [ Pa.] June 26, 2009)
The owner of two whole life insurance policies insuring the lives of her sons filed suit against the insurer alleging that it breached its insurance contract by charging the same insurance premiums for non-smoking juveniles as it did for smoking juveniles. Although the insurer asked whether the insureds smoked in the application for insurance, it had a single aggregate premium for all juveniles. The Third Circuit held that questions by an insurer do not amount to a representation that it will charge any particular type of premium based on the answers and the insurer did not breach its contract by using a single, aggregate premium.
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By Bryan D. Richmond and Daniel W. Gerber