Unum’s Checkered Past & Reputation Lead to Lawsuits

America’s largest disability company, Unum, is checkered by claim denials and past scandals. Unum was listed as number two in the American Association for Justice (AAJ)’s “Ten Worst Insurance Companies in America” in 2012. In 2008, Unum was found guilty of fraud in some of their insurance cases.

Based in Chattanooga, Tennessee, Unum is currently the largest disability insurance company worldwide. Despite its popularity, many claim denial victims, and even former employees of the agency, find the company’s policies unforgiveable in many aspects.

A former UnumProvident employee criticized the company’s denial policies in her personal blog “Linda Nee,” and warned her readers about potential tactics they may use against them. Due to her direct experience with Unum as an employee, Nee claims to have witnessed these tactics first-hand to deny legitimate claims.

For example, Unum victim Debra Potter also experienced these tactics, but had to battle them to claim her disability insurance. Potter is a former financial services worker and had signed up for Unum’s long-term disability insurance, in which she assumed would cover her should she ever need it legitimately. So when she was suddenly diagnosed with multiple sclerosis, she found herself surprised.

Unum denied her claim, suggesting Potter’s symptoms were “self-reported.” Potter’s physician testified that Unum had no basis to make that assumption, and that her concerns were completely legitimate. Despite that, Unum continued to deny Potter’s claim for three years until Potter threatened the insurance company with a lawsuit.

It is interesting that Unum denies so many claims so freely, considering their reputation was significantly damaged only a few years ago.

Back in 2008, a federal jury in Boston found that Unum had committed fraud in some of their disability cases by requiring customers to apply for Social Security benefits even though the company knew these specific customers were not eligible.

The verdict was based on a sample of several claims, which contained enough ambiguity to leave both sides with potential for victory. While most of claimants won their cases, the jury was unable to reach a decision on the last one presented in court. Unum processed almost 400,000 disability claims in 2007, and paid out more than $4 billion in benefits.

Also involved in this past scandal was disability insurance giant Cigna, a subsidiary of Unum. Cigna was accused of forcing certain clients to apply for Social Security disability benefits. Reportedly, Cigna threatened to cut off their insurance payments if they did not apply. The lawsuits explained that by sending claimants into the Social Security system, it allowed Unum and Cigna to reduce their claims reserves, raised the insurers’ profitability.

Both Unum and Cigna stated that referring claimants to Social Security is standard practice in both their companies, and that it is perfectly legitimate.

In addition to fraud, the lawsuits also criticized the companies’ practice, stated that their policy referrals had been causing a clog in their Social Security system, because of the questionable application; forcing taxpayers to pay needless processing costs.

On May 13, 2013, Cigna was ordered to pay $77 million to resolve state claims that it did not take the proper steps to determine if a person should receive disability benefits. Under the settlement agreement, Cigna agreed to re-evaluate denied claims.

If you believe that you or a loved one has been the victim of an improper claim denial by Unum or a Unum subsidiary, you have legal options. Please visit the Unum, UnumProvident, Disability Insurance Claim Denial Class Action Lawsuit Investigation. There, you can submit your claim for a free legal review and if it qualifies for legal action, a seasoned Unum Claim Denial lawyer will contact you for a free, no-obligation consultation. You will be guided through the litigation process at no out-of-pocket expenses or hidden fees. The claim denial attorneys working this investigation do not get paid until you do.