Sarah Mirando  |  May 28, 2013

Category: Labor & Employment

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Class Action Lawsuit Accuses Unum of Shortchanging Policyholders

By Anne Bucher

Unum Life InsuranceRuben Don has joined the growing list of plaintiffs who have filed lawsuits against Unum Life Insurance Co, of America, the largest disability claim provider in the U.S. In a class action lawsuit filed in a Los Angeles Superior Court on May 17, 2013, he alleges that Unum wrongfully denied an annual benefit increase that he was entitled to receive.

Long-Term Care Policy Provided for Annual Benefit Increase

Don has been insured by Unum since 1997. According to his class action lawsuit, Unum’s policies allow for inflation protection, ensuring that a policyholder’s monthly benefits will automatically increase. The policy states: “Your Monthly Benefit will increase each year on the Policy Anniversary . . . .” The terms of the contract go on to specify that the monthly benefit and lifetime maximum benefit increases “will be automatic and will occur regardless of your health and whether or not you have suffered a Loss . . . .” The terms of this policy are standard form policies that are approved under California law.


Don initially began receiving long-term care insurance benefits from Unum in 2009. Three years later, he received notice that his coverage was due to run out. When he contacted Unum to address his confusion about his claim, he was told that the increase only applies to the remaining funds rather than his lifetime benefit amount. When Don again inquired about the lack of an increase, Unum representatives told him that the increase only applied to the amount of remaining funds.

According to his Unum class action lawsuit, Unum informed him that “the annual increase applies to the amount of benefits remaining after an insured suffers a covered loss and begins receiving benefits.” Don argues that the actual policy language makes it clear that the annual increase applies to the lifetime maximum benefit.

Don Argues Unum’s Interpretation of Policy Terms Is Unreasonable

Don alleges that Unum systematically refused to provide an annual increase to policyholders. Unum also falsely informed policyholders that the annual increase applied to the remaining benefits rather than the lifetime maximum benefit amount.

Don accuses Unum of creating an institutional policy of wrongfully denying disability benefits to policyholders. He argues that Unum unreasonably interpreted its own long term care policy provision, which states that the policyholders’ monthly benefit will increase each year. The provision also states that the lifetime maximum benefit will also increase.

Don is seeking class action status on behalf of all Unum clients who have been victims of Unum’s unreasonable policy interpretation. He claims that, had he known how Unum would interpret the contract, he would have selected a different insurance company. Don is seeking unspecified damages on behalf of other Californians who have not received the Unum benefits they should have been entitled to receive.

 

The Unum Class Action Lawsuit case is Ruben Don v. Unum Life Insurance Co. of America, et al., Case No. BC509235, in the Superior Court of the State of California for the County of Los Angeles.

Find Out More about Your Legal Rights

If you believe that you have been denied Unum disability benefits that you were entitled to receive, visit our Unum/UnumProvident Disability Insurance Claim Denial Class Action Lawsuit Investigation page for more information. When you submit information about your Unum claim denial, a lawyer will conduct a free case evaluation to determine whether you qualify to file a lawsuit. You could be eligible to recover the full amount of benefits that you were entitled to receive from Unum.

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Updated May 28th, 2013

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