A preliminary approval was given by a California judge for a $46 million Unum disability insurance class action settlement.

The proposed class action settlement is between Unum Group and long-term care policy holders who claim they were wrongfully denied increases to their medical insurance benefits due to flawed calculations.

The disability insurance class action lawsuit alleged that the way Unum applied annual inflation increases and the way the company set their disability insurance policy anniversary dates caused policy holders to be denied the maximum benefit of their policies.

According to Unum, the class action settlement applies only to a small section of claims from the Portland, Maine area. Unum asserts that the settlement is about the calculation of claim benefits rather than the actual payout of claims and also contends the calculation process effects only a small number of older policies with antiquated policy language.

The class action lawsuit was initiated in California state court in May 2013 by plaintiff Ruben Don.  In the Unum disability insurance lawsuit, Don alleged that Unum was liable for a breach of contract claim and asserted that the company owed him $174,000 for his lifetime maximum benefit payout.

Don’s lawsuit was later moved to California federal court.  During this time Don passed away and his son Michael took over the lawsuit as a representative of his late father’s estate.  At that time a new class representative Tamara Pelham was added to the case.

The plaintiffs filed a motion for settlement back in November and the parties submitted their proposed agreement in February.

The original settlement was for 50.6 million dollars but when adjusted to represent its present day value it amounted to almost 46 million.  Out of the settlement, 9.6 million will be paid to attorneys’ fees and a service award of $60,000 will be given the the class representatives.

Payouts will then be made to two different nationwide subclasses.

This first subclass payout will amount to 18.6 million dollars and will be divided between 11,867 disability insurance policy holders. The second subclass will receive an additional 1.5 months of additional benefits.

Unum Class Action Lawsuits

Unum is the largest disability insurance company in the United States. The company provides policies to as many as 17 million Americans.  In 2002, 60 minutes revealed in a documentary that Unum had been systematically denying valid disability claims in order to increase company profits.

This discovery has led to hundreds of state and federal lawsuits against Unum.

Consumers who had a claim wrongfully denied while covered by Unum disability insurance may be able to pursue a lawsuit against Unum.  Consumers who are successful in their lawsuits may receive compensation for their wrongfully denied claims.

Some plaintiffs, like a former eye surgeon who filed a lawsuit against Unum in 2002, have been awarded millions of dollars in damages for the alleged wrongful denial of their disability claim.

Unum consumer protection attorneys can help potential plaintiffs evaluate their cases and determine if bringing a lawsuit is the right option for them.

The Unum Disability Insurance Class Action Lawsuit is Michael Don, Executor of the Estate of Ruben Don et al. v. Unum Group et al., Case No. 2:13-cv-04502 in the U.S. District Court for the Central District of California.