Larry King, the CNN talk show host, sued an insurance agent who arranged the sale to investors of $15 million in coverage on King's life.
King, 73, filed a complaint in federal court in Los Angeles on Oct. 22 saying Alan Meltzer of Meltzer Group, which is based in Bethesda, Md., induced him to take out a new policy for sale and to sell an existing life insurance policy for less than its value.
Investors including hedge funds bet on people's life expectancy by purchasing their insurance policies on the secondary market. The policyholder gets a lump-sum cash payment, while the investors continue to pay premiums, hoping they'll eventually collect more from the death benefit than they've spent. King said his interest would best have been served by keeping his coverage or swapping cheaper policies for existing ones.
"Larry was the victim of inappropriate packaging of insurance policies which did not benefit him or his family and instead benefited the broker and the insurance company," said Marshall Grossman, a partner at Los Angeles-based Bingham McCutchen LLP, who represents King.