UNUM: INSURANCE DENIED

by Jane Mundy

UnumProvident has changed its name to Unum but that doesn't mean the largest disability insurance company in the U.S. - that provides disability insurance for more than 17 million Americans - has changed its bad faith insurance policies.

The consensus amongst Unum policy holders, both employers and employees is this: make sure that you do not have UNUM as your disability insurance carrier; they are happy to collect your money, but not likely to pay on a claim.

Unum intended to rebrand itself as a new company. The name change may also be intended to distance itself from the controversy it has garnered: Unumprovident is notorious for practicing bad faith insurance.

In January 2007, Unumprovident announced it was shortening its name to Unum after " progress was made both operationally and financially over recent years". It certainly made hefty profits by not making good on claims. Yet on the other hand, the company has also paid out millions of dollars in settlements due to dishonest practices.

Unum may have changed its name but it hasn't changed the company and it still faces a growing number of lawsuits. A recent lawsuit in February 2007, in Joyce Rogers vs. Unum Life Insurance Co. of America (case number: 07-C-180), claims that Unum allegedly failed to pay the plaintiff's late husband's life insurance policy in a timely manner after he passed away, causing the widow to suffer emotional distress. Mrs. Rogers is seeking $100,000 plus other relief against Unum.

In November 2002, a San Francisco court ordered Unumprovident to pay $7.5 million after it found that the company practiced bad faith in denying customer claims. As well, medical examiners were pressured and documents destroyed in order to deny claims.

In the same year, the TV series 60 Minutes ran a story about UnumProvident's bad faith practices. Interviews with former Unumprovident employees claimed that company management pressured its agents to deny new claims and terminate existing ones, regardless of whether or not the claims deserved to be closed, in order to meet monthly targets. Additionally, some former employees claimed that UnumProvident gave them bonuses for closing down a certain number of claims.

It is yet to be seen if Unum will change anything more than its name. In a recent settlement with insurance regulators in Maine, Massachusetts and Tennessee, UnumProvident agreed to change how it handles claims but did not admit to any wrongdoing in denying claims.

Meanwhile, the Department of Labor pressured Unumprovident/Unum to reassess claims that were denied or closed for any reason other than settlement, death, or reaching benefit maximums that date back to 2000. Unum has a lot of work ahead: it has to look at more than 200,000 denied claims.

Bad Faith Insurance

Bad faith insurance is a breach of contract; it is the insurance company's duty to uphold its end of an insurance policy. In order to prove that an insurance company has acted in bad faith, the policy holder must show that the insurance company has not honored a contract and did not pay the policy-holder what was due.

Bad faith insurance occurs when a policy-holder's claim is unjustly denied, unreasonably delayed or intentionally underpaid. It can also include an insurance company not adequately investigating a claim.

Protect yourself from Bad Faith Insurance

Read your insurance policy - especially the 'fine print' and get to know the insurance laws in your state - each state has different laws for how it deals with insurance companies. Knowing these laws will help to protect you.

A class action suit charges that Unum systematically denies disability claims. Currently there are over 2500 suits filed by policy holders under subsidiaries Unum Life Insurance Company of America, Provident Life and Accident Insurance Company, The Paul Revere Life Insurance Company, Colonial Life & Accident Insurance Company, Genex, and Duncanson & Holt. Unum Provident is also the agent handling claims under MetLife , John Hancock, New England Life and Equitable. UnumProvident has denied policyholder claims, claiming that the policyholder is covered under another disability plan or by retroactively changing the underwriting.

If you have been denied a claim from UnumProvident, now UNUM, you may be entitled to compensation. Contact an insurance lawyer to determine your options.

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