LINCOLN DISABILITY INSURANCE STRATEGY TO MINIMIZE BENEFITS FAILS
Thursday, December 12th, 2019
We have written in the past about Lincoln Financial Group’s efforts to shut down claims and our own firm has represented a number of claimants whose disability insurance coverage was denied or terminated from Lincoln. Despite our experience with this company, we found this case to be troubling, both for the clear effort by Lincoln to deny a claimant their rightful benefit, and for the callousness with which the company is treating a policyowner.
A lead tax partner at a large tax and consulting firm works a full day on Friday, August 29, 2014 and then works part of the day on both Saturday, August 30 and Sunday, August 31, before going off to his summer cabin for the Labor Day weekend.
While at the cabin, he suffers a heart attack, goes to the hospital and is admitted to the intensive care unit. He has a cardiac angioplasty on September 1. A drug-eluting stent is inserted. He is discharged on Tuesday, September 2, with several diagnoses, including myocardial infarction (heart attack).
He returns home from the cabin, then goes to work on Wednesday, September 3, but leaves early because of numbness. Later that day, he is admitted to the hospital and is found to have had a stroke. He goes home on Friday, September 5, but returns to the hospital on Saturday, September 6. He’s had a second stroke.
He remains in the hospital until September 12, when he is transferred to a rehab facility, where he remains until October 20.
The tax partner had received a raise from his employer on September 1, 2014, during which time he would have been on vacation as part of the Labor Day weekend. However, Lincoln decides that his first day of disability is August 31, 2014. This interpretation of Active Work dates, and Date of Disability works better for Lincoln, keeping the monthly benefit to his pre-raise salary and saving Lincoln several thousand dollars per month. The height of conduct influenced by its financial conflict of interest in its dual capacity as claim administrator and the funder of the benefit payments.
As stated by the U.S. District Court:
“The only reasonable interpretation of the Policy is to read the “last day worked” in conjunction with the Active Work provision. Under this scenario, the employee on paid vacation would still be Actively at Work and receive benefits tied to his salary increase while on vacation.”
There were two appeals to this case before it went to federal court, which tells us that Lincoln really did not want to pay the tax partner the full amount of his disability benefits. The extent of Lincoln’s efforts to short this person’s benefits speaks to the attitude of the insurance company to its claimants. This fact pattern, while egregious, is not a unicorn – but is part of a pattern and practice.
We’ve simplified the case scenario, but can discuss the case with readers if they are concerned about a similar situation with Lincoln Financial or any disability insurance company. We can be reached at 877-583-2524.
Harlan Ten Pas v. Lincoln Nat’l Life Ins. Co.