Despite 18 Years Of Life Insurance Premiums, Cigna Refused To Pay Widow

(Orlandokam)

Two decades ago, a man in New Jersey had a job that included a life insurance benefit. When he left that job, he was able to keep that policy if he continued to pay all the premiums on his own, which he did for 18 years. So why did the insurance company refuse to pay this man’s widow after he passed away? Hint: It rhymes with stupidity.

The Newark Star-Ledger’s Bamboozled column — penned by Consumerist’s own Karin Prime Mueller — has the story of a widow that couldn’t understand why, after 18 years of accepting payments from her late husband, Cigna had suddenly come to the conclusion that this policy was not valid.

Back in the ’80s and ’90s, her husband worked for the Newark Housing Authority, where he first obtained the policy. Even after he left that job, he continued to pay his premiums on time. So after he passed away last August, she and her son contacted the Housing Authority to submit a claim.

The Housing Authority first told her it would be two weeks. When that time came and went, she was assured that a check was coming. Another follow-up with the NHA revealed that there was some confusion with Cigna, the insurer.

See, at some point after her husband had left the NHA, the policy had been changed to say that only people who worked there for 25 years were eligible. However, her late husband’s policy — which only required that he pay the premium — should still be valid. And if not, Cigna should have to refund all those years of premiums.

Cigna later reaffirmed its decision to deny the claim based on a condition that was not part of the deceased’s policy.

After hitting what she believed was a dead-end with both Cigna and NHA, the widow and her son reached out to Bamboozled for help.

“The question is why they collected payments until his death, every month, sending him statements for 18 years, and they denied the policy,” says the son.

A look at the paperwork for the policy makes it quite clear that the widow’s claim was valid.

“With respect to retirees who have completed less than 25 years of continuous service, you must contribute toward the Plan’s cost,” reads the documentation associated with the policy. We’re not quite sure how Cigna could miss something that obvious. Probably because it refused to look… until the media got involved.

Shortly after Bamboozled contacted Cigna, the widow got a call from Cigna saying she’d been right the whole time and that she’d be getting her check in a matter of days.

And unlike the other promises, the company actually made good on this one; she received a check for the full amount, plus interest, the next day.

Cigna said that after “reviewing” (i.e. “reading”) the claim and “recognizing the underlying policy language at issue” (translation: “recognizing that some of our employees are morons”), the claim was valid.

As the article points out, insurance companies all have specific appeals processes for reviewing disputes. However, in our experience, many insurers make this process as opaque and obtuse as possible, so many consumers don’t know how or where to begin. You often need to specifically ask to initiate an appeal; not just hang up and try again.

by Chris Morran via Consumerist