Newman v. Metropolitan Life Insurance Company
United States Court of Appeals for the Seventh Circuit
885 F.3d 992 (2018)
- Written by Rose VanHofwegen, JD
Facts
When she was 56, Margery Newman (plaintiff) bought a long-term-care insurance plan from Metropolitan Life Insurance Company (MetLife) (defendant). Beforehand Newman read a MetLife brochure that described the plan and payment options, and she chose a reduced-pay-at-65 option. The brochure said, “By paying more than the regular premium amount you would pay each year up to the Policy Anniversary on or after your 65th birthday, you pay half the amount of your pre-age 65 premiums thereafter.” The brochure advised that it provided only a general overview and that the policy governed actual terms. A week later, Newman received her 29-page policy. It mentioned the reduced-pay option only once and said Newman would pay $3,232 premiums before 65, and $1,616 afterward. The policy reserved MetLife’s right to change premium rates but specified that any change “will apply to all policies in the same class as Yours.” The rates section reiterated that MetLife “reserved the right to change premiums on a class basis,” but the policy never defined the word class. Newman paid $3,232 until 65, then $1,616. But after Newman turned 67, MetLife more than doubled her premium to $3,852. MetLife said it increased rates classwide for all long-term-care policyholders, including those over 65 who chose the reduced-pay option. Newman sued, arguing the brochure and policy set a fixed premium that halved at age 65. The district court dismissed for failure to state a claim, and Newman appealed.
Rule of Law
Issue
Holding and Reasoning (Wood, C.J.)
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