Some employers provide a wide spectrum of benefits for their employees. While retirement accounts and health insurance policies get most of the attention, today we’ll be talking about another job benefit: life insurance.
Often, corporations will buy life insurance policies to cover key employees as a way to protect their own interests; the corporation collects the benefits if the worker dies. Other bosses, though, recognize that the death of a worker places a huge hardship on their survivors and families, and—for a modest cost—buy life insurance to cover all (or most) employees, and (in some cases) retirees. For a modest annual cost, the business owner earns the good will of his entire workforce.
That is, until the time comes to collect on the policy.
Unscrupulous insurance companies
Some insurance companies have been caught using abusive and deceptive practices when it comes time to pay out benefits on employment-based life insurance. For instance, a 2011 investigative report by Bloomberg Markets magazine found insurance companies would reject claims, delay life insurance settlements, and even reclassify the cause of death to “suicide” in order to withhold payment to survivors. Other sources allege that life insurance companies have delayed payments to grieving widows in anticipation that they would forget about the claim, give up, or die of old age.
The motivation for such action is clear: every penny that the insurance company successfully withholds enriches the company. Because the employer, not the beneficiary, originally paid the premiums there is a fair chance these abuses will not be pursued in court.
The ERISA factor
The Employee Retirement Income Security Act (ERISA) of 1974 regulates most private sector employer-provided life insurance policies. ERISA was written to give beneficiaries specific legal rights to demand settlement of life insurance claims. This law is extremely complex, however, because it deals with retirement, health, and other welfare benefit plans in addition to life insurance. Only a life insurance attorney with extensive experience with this federal legislation is well positioned to help clients leverage their rights in an ERISA life insurance claim.
ERISA isn’t perfect. According to Tom Baker, the deputy dean of the University of Pennsylvania Law School in Philadelphia. “If ever a law backfired for the public, ERISA is the perfect example.”
A series of federal court decisions have created tradeoffs when consumers evoke their ERISA rights for life insurance. Plaintiffs must give up their rights to demand jury trials or to ask for compensatory and punitive damages from balky life insurance carriers. Their rights to cross-examine expert witnesses are curtailed. And because ERISA is a federal law, under the doctrine of preemption state regulatory agencies can give little assistance to plaintiffs.
Before you can bring an insurance denial lawsuit under ERISA, you may have to challenge the insurance company in a series of appeal hearings. And you may have only a limited time—as short as six months—to protest the denial of benefits.
It may seem that, even with ERISA, the odds are stacked against you.
Your case is winnable… and worth winning
Don’t give up. Even though ERISA is an imperfect tool for defending your rights, the right life insurance lawyer can apply its provisions strategically to get your denied life insurance claim settled.
If you are dealing with a life insurance company…
- That tells you the policy was canceled…
- That says it cannot verify that the decedent died in a manner that is covered under the policy…
- That it cannot release benefits in the form of cash…
you need to assert your legal rights to receive the life insurance benefits that rightly belong to you. The first step is calling (215) 531-7961 to connect with the attorneys at Life Insurance Law. Our legal professionals talk every week with beneficiaries who have questions about ERISA. We successfully have handled complicated cases that involved ERISA law and gained our clients the settlement they deserve.
Robust and confident legal representation can mean the difference between getting what you deserve and walking away empty-handed. Call Life Insurance Law today. We have the determination needed to beat the insurance company at its own game.