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Insurance Company Sued for Charging Smoker's Rate for Children

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At a glance:

A class action lawsuit is in the works after a father in Ohio discovered that he is paying a "smoker's rate" for his childrens' life insurance policies. 
 
The company sued is AXA Equitable Life Insurance. Some in the industry say it is a common practice since companies do not know which children will grow up to be smokers. 
 
Besides higher premiums, the smoker's rating leads to lower dividends and interest for the policyholder. 
 

Coughing up smoker's rates for children

InvestmentNews - 5/30/2006 8:39 AM

NEW YORK - AXA Equitable Life Insurance Co. could face a class action involving more than 100,000 policyholders who may have bought insurance policies for children, including babies, at rates reserved for smokers.
 
"Most logical-thinking Americans would wonder why an insurance company would assume that a child smokes," said Joseph H. "Jay" Aughtman, an attorney at Beasley Allen Crow Methvin Portis & Miles PC in Montgomery, Ala., which is the plaintiff's counsel in the case.
 
Smoking rates can be up to two and a half times non-smoking rates, according to industry experts
 
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