Widow of banker settles life insurance case

The widow of a banker whose employer fired him and then collected on a life insurance policy when he died has settled her lawsuit against the employer for an undisclosed amount.

Irma Johnson sued Amegy Bank after she discovered because of a post office error that the bank received $4.7 million when her husband died of brain cancer in 2008. Dan Johnson had been diagnosed with the terminal cancer before the bank bought policies on him and more than 40 other bankers in 2001, according to her lawsuit.

Amegy fired Dan Johnson a few months after it purchased the policies.

The industry refers to such life insurance as “dead peasant” policies. They provide tax benefits for employers who take out the insurance, and a windfall if the covered employee dies, typically without paying anything to surviving family members.

In her lawsuit, Irma Johnson asked for the net proceeds Amegy received, $3.8 million — the death benefit minus the premiums Amegy paid. Under terms of the settlement Thursday, neither party disclosed its details.

“We settled to the mutual satisfaction of both parties,” Amegy Bank spokeswoman Leigh Akin said.

Johnson's lawyer, Mike Myers of McClanahan Myers Espey, also said only that both sides were satisfied.