Photo: Hudconja
A settlement shows that another huge, well-known corporation has engaged in deceptive practices in how it treats its customers.
Prudential Financial denied more than 200 life insurance claims although the company collected life insurance premiums from participants for extended periods, the U.S. Department of Labor said Wednesday.
Prudential offered group life insurance policies to businesses that allowed plan participants to opt for payroll deductions to pay for additional, supplemental coverage. For this type of insurance, the insured is required to fill out a form indicating that they’re in good health before being covered.
Investigators determined that, going back to at least 2004, Prudential collected premiums for supplemental coverage despite not having the form filled out.
From 2017 to 2020, the firm then denied claims after the participants died, saying the participants’ failed to provide the evidence of insurability form when they applied for insurance.
“This egregious practice left grieving families without the life insurance for which their loved ones had paid, in some cases, for many years,” said Solicitor of Labor Seema Nanda.
Under the settlement, Prudential is required to pay life insurance benefits when premiums were collected for more than three months even if there was no evidence of insurability.
In its investigations, the department found that other life insurers also engaged in similar practices, the department said in a statement.
“We would urge all insurers to examine their practices to ensure that they aren’t engaged in similar conduct,” Nanda said.
