October 18, 2014 • By Dennis Beaver
Today’s story is a modern day version of David and Goliath where Prudential Financial, the second largest American life insurer, is Goliath.
This behemoth of a company is no stranger to jerking around policyholders and was involved in a billion dollar class action lawsuit in 2000. Prudential radiates a corporate arrogance which we discovered while trying to help Hanford Sentinel reader “Mike” obtain payment on a life insurance policy on his wife, “Susie” who, after a lengthy illness, died in July of 2011.
“You Divorced Before Her Death”
It was a “Dependent Life Insurance Policy” obtained while Mike was employed by Lockheed-Martin and premiums were paid over 20 years. While the couple divorced in May of that year, in a recorded phone conversation with a representative of the Lockheed-Martin Employee Service Center, Mike was told that the life insurance policy on Susie could remain in effect if he wanted. He did, and continued to make premium payments.
In general, this type of life insurance requires a couple to be married, but there are many reasons why coverage can still remain in effect, for example, court ordered child support, or other financial issues, which was Mike’s situation. He explained to us that his wife’s medical problems led to tremendous debt issues. He did not wish her death, but sadly, maintaining the policy was the only way he could recover financially.
Of course, none of this mattered to Prudential, who refused to pay the death benefit. We were met with a “Go pound sand!” attitude by them as well. No, they weren’t paying this claim, not now, not ever. Mike needed to retain a lawyer promptly, as the clock was ticking on Prudential’s appeal process. He needed a “David.”
For the next two years, attorneys Ron Jones and David Kahn of the Kahn, Soares and Conway law firm in Hanford would prove to be more than a match for Goliath.
“Stonewalled and Lied To – But We Did Not Give Up”
“Insurance companies expect most people in Mike’s situation to just go away,” commented Jones, “But if you are right, don’t give up! You have a right to appeal, which is exactly what we did, asking Prudential to revisit the claim and to consider that Mike had been advised he could maintain the life insurance policy on his wife.
“Copies of all documents, notes, transcripts of recorded phone conversations, internal communications – anything which supports your position must be asked for. But be aware that unjustified delays and playing hide-the-ball is often standard operating procedure. That was precisely what we saw take place–over many months–including outright denials that they had certain information which we later discovered. We were stonewalled and lied to but did not give up.
“Prudential claimed that Mike was informed on May 13th, 2011 that his divorce terminated the life insurance policy on Susie, but they never could produce a recording of that phone conversation. Internal communications painted Mike as someone who was trying to take advantage of a mistake made by one of their representatives in not removing the dependent life insurance at that time,” Kahn pointed out.
“It was obvious they never considered the possibility that he was telling them the truth, and then, you have to imagine the look on their faces when, on September 24th 2012 this e-mail comes in: ‘We were finally able to locate the 5/31/11 call, informing him that he could keep the life insurance. So, what should Prudential do now?”
“Obviously, basic ethics–simple right and wrong–would give a decision maker only one choice, and a check should have been written immediately. But that’s not what Prudential did. Instead, they kept quiet about that stunning piece of evidence, and in a batch of documents sent to us, there was that e-mail! It was the smoking gun, proof that Mike had been truthful,” Kahn stressed.
“We immediately brought it to their attention. And the response? ‘Sorry, you’ve provided us the evidence too late. Case closed.’
“At that point, following Beaver’s recommendation, we brought this to the attention of the California Department of Insurance,” Jones stated.
Help From the Department of Insurance
You and the Law had been kept in the loop, and we, too, were amazed, that, despite proof
that Prudential knew in September of 2012 that claim should be paid, still they refused.
It was time for us to contact the Press Relations office at the Insurance Department: “My reader needs your help, here is your file number, please look into this.”
Now, we can’t reveal what they and Prudential talked about, but a week later Jones and Kahn phoned our office.
“We just got off the phone with Mike. He is holding a check in the amount of $119,000.”
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.