Kansas City Life Insurance Settles $40 Million Class Action Over Excessive Cost Claims

Kansas City Life Insurance Co. has reached a $40 million settlement to resolve a class action lawsuit alleging it charged excessive insurance costs on various life insurance policies. The lawsuit claimed that Kansas City Life Insurance used non-mortality factors to set insurance rates, failed to decrease rates when projections improved, and improperly used expenses in rate determination despite separate monthly expense charges. This allegedly resulted in excessive charges that violated policy terms.

The settlement benefits policyholders who owned specific life insurance plans from Kansas City Life Insurance active from January 1, 2002, including Better Life Plan, LifeTrack, Century II, Performer series, and Executive series among others. There is also a subclass for Missouri residents holding Century II policies. Policyholders do not need to file claims to receive benefits, and payment amounts will be based on the insurance costs paid during the class period.

The class action was filed in the U.S. District Court for the Western District of Missouri and involves a substantive legal review overseen by this federal court and the 16th Circuit Court of Jackson County for Missouri-specific claims. Kansas City Life Insurance has not admitted wrongdoing but agreed to the settlement terms to resolve the dispute.

The exclusion and objection deadline is October 27, 2025, with a final hearing scheduled for December 12, 2025. Stakeholders can verify eligibility or get more information through the designated settlement website or toll-free contact.

This settlement provides significant regulatory and compliance insights into insurance rate-setting practices, highlighting the importance of transparency and adherence to contractual obligations in policy cost determinations. It underscores growing scrutiny of insurer practices around cost allocation and adjustments tied to risk and expenses.

For insurance professionals, this case demonstrates the potential financial and reputational risks insurers face from rate-setting methodologies deemed inconsistent with policyholder agreements. It also emphasizes the need for rigorous regulatory compliance and clear communication regarding insurance cost structures, especially for long-term life policies.