Unum, the world’s largest disability insurance company, has been on the receiving end of several accusations of bad faith insurance denial. These accusations have come from investigative journalists and also from a number of Unum lawsuits.

Bad faith is a legal term that means that one party in a contract is trying to avoid their contractual obligations. In the context of disability insurance, bad faith can refer to an insurance company denying disability benefits to a legitimate disability benefits claim submitted by a policyholder.

Back in 2002, the television news magazine “60 Minutes” investigated Unum’s business practices. This “60 Minutes” segment included various allegations of bad faith, including bad faith denials of Unum disability claims.

One of the subjects of the Unum segment was an eye surgeon who filed for disability insurance once he developed Parkinson’s disease. He eventually filed an Unum bad faith insurance lawsuit, alleging he was the victim of an Unum bad faith disability benefits denial. According to statements made in the interview, three doctors argued that the surgeon was disabled, and that his hand tremors were so severe that he could not perform a basic eye exam, let alone perform eye surgery. However, according to the interview, an Unum in-house physician asserted that a man with Parkinson’s disease and severe hand tremors could still perform eye surgery. Part of the company’s claim that the policyholder in question was not disabled reportedly came from a private investigator’s footage that allegedly showed the surgeon playing with a football in his backyard—footage the surgeon asserts is actually his 23-year-old son who looks like him.

To further support the allegations of bad faith insurance, “60 Minutes” also interviewed then-current and former Unum employees about business practices at Unum. Allegedly, there was a substantial culture of benefits denial by any means necessary within the insurance company. Unum employees asserted that claims handlers are strongly pressured to close down Unum disability claims to save the company money. Unum employees alleged that entire departments had monthly quotas of disability insurance claims to deny. Allegedly, this could be millions per month for a single department.

Unum Disability and Insurance Claim Denial Practices

This culture of disability insurance denial which allegedly pervades Unum included monetary compensation to give employees incentive to deny allegedly valid insurance claims. Departments and claims handlers that successfully denied a claim could allegedly receive that now-notorious “hungry vulture award” for denying the most claims. Unum employees alleged that claims handlers who denied the most claims could receive cash bonuses.

Additionally, part of the “60 Minutes” segment included an interview with a former Unum in-house physician who had filed a wrongful termination lawsuit with Unum. He alleged that Unum fired him because he would not bow to pressure to deny disability benefit claims from legitimately-disabled policyholders.

Many of the claims made in the Unum investigation on “60 Minutes” have been echoed in various Unum lawsuits. Unum has faced thousands of Unum lawsuits over allegations that they have acted in bad faith insurance by denying disability benefits to disabled policyholders. Unum has often settled lawsuits out of court, allegedly to avoid the bad publicity of going to trial. However, several Unum lawsuits that have gone to federal court have ended in massive settlements for plaintiffs, including awards of punitive damages—monetary awards designed to punish offenders and prevent further misconduct.