Unum Continues to Face Bad Faith Insurance Lawsuits

Unum controls a larger share of the long-term disability insurance market than any other corporation, both domestically and internationally. Their revenue is tens of billions of dollars per year. However, lawsuits have alleged that part of this massive profit comes from business practices designed to prevent policyholders from realizing the benefits of their long-term disability insurance policies.

Unum offers various types of insurance policies, in the U.S. and abroad. The company provides several types of insurance companies, including disability insurance, life insurance, and other employee benefits. In its earliest founding, the predecessor companies to Unum were considered almost revolutionary in offering disability insurance to high-risk coal miners and sawmill workers, and creating return-to-work programs for policyholders to aid them in returning to the workforce. However, in recent years this history has been tarnished by allegations that the organization has used bad faith tactics to deny legitimate LTD claims. 

An investigation by the television newsmagazine “60 Minutes” allegedly uncovered various practices designed to deny policyholders the payouts of their long-term disability insurance. This included denial quotas – set numbers of policies agents were required to close out. Additionally, the company issued the now-infamous “hungry vulture award” to employees which denied the most LTD claims. 

Unum has allegedly used a variety of tactics to deny long-term disability insurance claims. This included using ambiguous communications to stall policyholders’ appeals until their right to appeal lapsed. In other cases, they allege that the patient’s claims are invalid and they are not truly disabled. 

The “60 Minutes” segment actually interviewed a former Unum staff physician who alleged that the company ordered them to falsify medical records to make it easier to deny valid LTD claims. In other cases, Unum will claim that despite a person’s disability, they do not fit the policy’s definition of “totally disabled” despite physician’s recommendations. 

Lawsuits have been filed against Unum, alleging that long-term disability insurance payouts were denied in bad faith and against the terms of their policies. These bad faith insurance lawsuits seek the reinstatement of their long-term disability insurance, along with punitive damages – damages designed to punish the offender to discourage further misconduct. Usually, these lawsuits come after policyholders have exhausted Unum’s internal appeals process.