Hartford Life Sued For “Bad Faith” Over Pricing Consumers Out Of Their Life Insurance After Becoming Disabled

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Santa Monica, CA – California consumers are being priced out of their life insurance policies once they become disabled resulting in the loss of valuable coverage, according to a class-action lawsuit accusing Hartford Life and Accident Insurance Company of “bad faith.”

According to the lawsuit:

“Consumers purchase life insurance coverage to provide peace of mind to themselves, and financial support to their families when they die. The life insurance coverage at issue here is no exception. In fact, Plaintiff’s and class members’ life insurance coverage provides an extra layer of protection to ensure consumers are able maintain their life insurance coverage in the event they become disabled. Plaintiff’s and class members’ life insurance policies include a ‘waiver of premium’ provision intended to ensure that consumers will not be priced out of their coverage in the event they become disabled and lose their job. Under the waiver of premium provision, an insured that becomes disabled is no longer required to pay premiums on his or her life insurance coverage and cannot be dropped from coverage for failure to pay. Without such a protection, consumers face the very real threat that their coverage will be terminated if they are unable to pay their premium when they become disabled, resulting in the loss of valuable life insurance coverage.”

The class action lawsuit filed by Shernoff Bidart Echeverria LLP and Consumer Watchdog alleges that Hartford created an unlawful scheme to deny valid “waiver of premium” claims. Hartford benefits financially from this illegal business practice by terminating valuable life insurance coverage that it would otherwise be required to pay out upon the insured’s death, according to the lawsuit.

Download the Class Action Lawsuit against Hartford here.

“Hartford is purposefully ignoring the law in order to deny insurance coverage and reap the financial rewards,” said Travis Corby of Shernoff Bidart Echeverria LLP. “We filed this lawsuit to expose this bad faith practice and to warn others who may have been taken advantage of by Hartford.”

Under California law, a consumer is legally disabled, referred to as “Total Disability,” when he or she cannot perform the substantial and material duties of his or her job due to sickness or bodily injury. Hartford illegally ignores this standard and denies waiver of premium claims where an insured can do “any work,” even if an insured could work only a few hours a week at a low-paying job. As a result, disabled consumers face the very real likelihood they will not be able to afford their life insurance premiums and will lose their life insurance coverage when they are sick or injured.

The results are devastating on consumers. Keith Laster, the lead plaintiff in the case, was insured under a $250,000 Hartford life insurance policy. Mr. Laster suffers from arthritis that caused severe pain in his left shoulder and left wrist after working as a senior construction manager for the City of Anaheim. After Laster’s doctor performed surgery to help with the condition, Mr. Laster experienced severe pain and was prescribed medications that prevented him from returning to work, either in the field or at a desk.

During this process, Mr. Laster applied for a waiver of premium under his life insurance policy with Hartford, but was initially denied. In October of 2014, Hartford reversed its denial stating that he was indeed “totally disabled.” Then, nearly a year later, Hartford revoked the waiver of premium stating Mr. Laster was not prevented from doing “any work.” Hartford wrongly concluded that Mr. Laster was not disabled and therefore refused to waive the premium on his life insurance coverage.

“I bought life insurance to provide peace of mind to myself and financial support to my family if something were to happen to me, including if I became disabled” said Mr. Laster, the lead plaintiff in the lawsuit. “I feel like I have been deceived and left hung out to dry with no protection.”

The lawsuit seeks to compel Hartford to apply the correct definition of “Total Disability” when reviewing “Waiver of Premium” claims, and to reimburse consumers who have been harmed as a result of Hartford’s unlawful scheme to deny life insurance benefits.

“Hartford is preying on consumers when they are most vulnerable. Without the ‘waiver of premium’ protection Hartford promised to consumers, consumers face the very real threat that their coverage will be terminated if they are unable to pay their premium when they become disabled, resulting in the loss of valuable life insurance coverage,” said Jerry Flanagan, Litigation Director for Consumer Watchdog and one of the lawyers in the case. “Consumers like Mr. Laster are being deprived of the benefits they paid for and are entitled to.”

The case, Keith Laster et al. v. Hartford Life and Accident Insurance Company, was initially filed in Los Angeles Superior Court, Case No. BC645326, but was later removed to the United States District Court, Central District of California, Case No. 2:17-cv-00851 BRO (JEMx)

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Shernoff Bidart Echeverria LLP leads the nation in protecting policyholders from insurance company abuse. The firm has been protecting the rights of insurance consumers, both individuals and businesses, for over 40 years after having set the legal precedent requiring insurance companies to act in good faith. For more information, go to: http://www.shernoff.com

Consumer Watchdog is a nonpartisan consumer advocacy organization with offices in Washington, D.C. and Santa Monica, CA. Find us on the web at: http://www.ConsumerWatchdog.org

Jerry Flanagan
Jerry Flanagan
Jerry Flanagan is Consumer Watchdog's Litigation Director. Flanagan leads Consumer Watchdog’s litigation efforts in the areas of health insurance coverage and access to treatments. He has over 20 years experience working in public interest and health care policy, legislation and litigation.

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