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After 25 years my life insurance cut in half?

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JohnnyG53

Junior Member
I went on disability retirement about 14 years ago. I get union pension and social security. I've been on the same insurance thru my union for 25 years. I've been on self pay for maybe 12 years now on my health insurance, which also includes life insurance. In our summary plan description booklet we have a standard group life benefit with the following categorys, employee life, disabled life, retiree life, etc.. and a optional step-up benefit for group life with the same categorys, employee life, disabled life, retiree life, etc.. My union has always told me we have the optional step-up benefit, which would double our benefit from the standard $18,000 to $36,000. My union official still says we have the step up, but I can't get much more help from him. Now our insurance company tells me now that I don't have the step-up option. I get various answers, depending on who I talk to at the insurance company. Either the union has it, but I don't, or we've never had the step-up, or we looked into but never got it. It looks very clear to me in my summary plan description book that I should have the standard group benefit and the optional step up benefit. I've asked the insurance to tell me how the reach their conclusion, but I never get a straight answer. I've wrote them a letter asking them to explain this, and they never have answered me. Any suggestions? What type lawyer do I need? I don't have a lot of money to get a lawyer, would one represent me and ask the insurance company to pay his fee? Thanks, JohnnyG
 


Dandy Don

Senior Member
Please tell us what state you live in.

File a complaint with your state insurance commissioner (you should be able to find the mailing address by using a search engine) about this so that the commissioner can contact the company on your behalf. Also ask the commissioner if he/she could get a copy of your policy so you or your family will have it for future reference.

You may also want to consider purchasing your own individual life insurance policy to help provide for your family in the event that something happens with the group policy where they might find an excuse not to pay out the benefit.
 

cbg

I'm a Northern Girl
Johnny, how old are you? There is a reason I'm asking. If you'd rather not post your age publicly, I accept PM's.
 

JohnnyG53

Junior Member
Please tell us what state you live in.

File a complaint with your state insurance commissioner (you should be able to find the mailing address by using a search engine) about this so that the commissioner can contact the company on your behalf. Also ask the commissioner if he/she could get a copy of your policy so you or your family will have it for future reference.

You may also want to consider purchasing your own individual life insurance policy to help provide for your family in the event that something happens with the group policy where they might find an excuse not to pay out the benefit.
I can't get my own life insurance now. I've had open heart surgery, and stints put in right when I went out on disability. Thanks
 

LdiJ

Senior Member
I can't get my own life insurance now. I've had open heart surgery, and stints put in right when I went out on disability. Thanks
Most likely the insurance that you have is term insurance. With term insurance either your premium does not remain constant for the rest of your life or your amount of insurance does not remain constant for the rest of your life. Term insurance for a healthy 64 year old would be enormously expensive, and term insurance for a 64 year old with health issues would be non-existent, as you already know.

You might want to consider putting aside some money monthly to eventually replace the insurance amount that you believed that you had.
 

justalayman

Senior Member
Most step ups i have dealt with are purchased on an individual basis. In other words, the base policy is included in the insurance package and if any employee chooses to increase the amount of insurance benefits, they pay an additional premium.

Your benefits are based on whatever your contract says you have (union contract).

I disagree with ldij on this. In a group term policy your payments and benefits are whatever your contract states they are. The benefit of a group policy is the usually higher premiums for the older members is supplemented by the premiums paid by the younger members, many of which are never expected to remain employed long enough to obtain the benefits. That means the money paid in during their tenure is essentially free money able to be paid on the group policy. That tempers the usually high price of retirees insurance. That is why your benefits do not reduce and your premiums do not increase, other than what is negotiated in your union contract.

What level of office did the union rep hold?
Does your Union contract address benefit amounts?
 

cbg

I'm a Northern Girl
It is not unheard of for term insurance that is employer based to not only be age banded for the premium, but also to reduce automatically at certain ages. As an example, at age 65 our employees see the insurance that the university pays for reduced by 35%. The insurance they pay for does not reduce. But it's by no means impossible that Johnny's contract allows for age reductions. He would need to ask his union if that is the case, but such provision do exist.
 

justalayman

Senior Member
I don't disagree but I don't see anything similar in what is being posted. It sounds like we are dealing with a simple; is he under the base policy benefit rate or the optional step up (double the base rate).
 

cbg

I'm a Northern Girl
And I'm not disagreeing with you, either. 64 would be an odd age for a reduction of the kind I'm talking about. My primary point is that there are precedents for life insurance cuts and his union is the best one to determine whether this is an appropriate cut under their contract or not.
 

LdiJ

Senior Member
Most step ups i have dealt with are purchased on an individual basis. In other words, the base policy is included in the insurance package and if any employee chooses to increase the amount of insurance benefits, they pay an additional premium.

Your benefits are based on whatever your contract says you have (union contract).

I disagree with ldij on this. In a group term policy your payments and benefits are whatever your contract states they are. The benefit of a group policy is the usually higher premiums for the older members is supplemented by the premiums paid by the younger members, many of which are never expected to remain employed long enough to obtain the benefits. That means the money paid in during their tenure is essentially free money able to be paid on the group policy. That tempers the usually high price of retirees insurance. That is why your benefits do not reduce and your premiums do not increase, other than what is negotiated in your union contract.

What level of office did the union rep hold?
Does your Union contract address benefit amounts?
Except that I wasn't talking about the group portion of the policy, I was talking about the step up portion.
 

justalayman

Senior Member
Except that I wasn't talking about the group portion of the policy, I was talking about the step up portion.
How do you seperate the two in this situation? There is no reason to believe this is not a group policy and as such, anything to do with an individual policy is meaningless.
 

JohnnyG53

Junior Member
Most step ups i have dealt with are purchased on an individual basis. In other words, the base policy is included in the insurance package and if any employee chooses to increase the amount of insurance benefits, they pay an additional premium.

Your benefits are based on whatever your contract says you have (union contract).

I disagree with ldij on this. In a group term policy your payments and benefits are whatever your contract states they are. The benefit of a group policy is the usually higher premiums for the older members is supplemented by the premiums paid by the younger members, many of which are never expected to remain employed long enough to obtain the benefits. That means the money paid in during their tenure is essentially free money able to be paid on the group policy. That tempers the usually high price of retirees insurance. That is why your benefits do not reduce and your premiums do not increase, other than what is negotiated in your union contract.

What level of office did the union rep hold?
Does your Union contract address benefit amounts?
I've been trying to get this resolved for over a year, numerous calls to local union, and district office, basically no help, sorry to say. Here is one excerpt from plan booklet " there will be no reduction in standard group life coverage. An employees additional life benefits, active, retired, disabled, etc. will terminate at age 65." So, it does sound like the step-up would stop when I turn 65, in a little over a year. It's just frustrating that I've got the run around for over a year. One union official didn't have the summary plan booklet and never got one, another would say he would call back and never would. The insurance company answers varied depending on who I talked to, and when I wrote them asking them to explain to me, or show me in our summary booklet, how they reach their decision, I never received a reply. If they told me I have it now, but it expires when I turn 65, I could see that. But that has not been any of their answers. I appreciate all the replys and advice. Thanks to all for their time.Johnny
 

JohnnyG53

Junior Member
I went on disability retirement about 14 years ago. I get union pension and social security. I've been on the same insurance thru my union for 25 years. I've been on self pay for maybe 12 years now on my health insurance, which also includes life insurance. In our summary plan description booklet we have a standard group life benefit with the following categorys, employee life, disabled life, retiree life, etc.. and a optional step-up benefit for group life with the same categorys, employee life, disabled life, retiree life, etc.. My union has always told me we have the optional step-up benefit, which would double our benefit from the standard $18,000 to $36,000. My union official still says we have the step up, but I can't get much more help from him. Now our insurance company tells me now that I don't have the step-up option. I get various answers, depending on who I talk to at the insurance company. Either the union has it, but I don't, or we've never had the step-up, or we looked into but never got it. It looks very clear to me in my summary plan description book that I should have the standard group benefit and the optional step up benefit. I've asked the insurance to tell me how the reach their conclusion, but I never get a straight answer. I've wrote them a letter asking them to explain this, and they never have answered me. Any suggestions? What type lawyer do I need? I don't have a lot of money to get a lawyer, would one represent me and ask the insurance company to pay his fee? Thanks, JohnnyG
I appreciate all the answers and comments. I suppose my best, or only, options, is to contact my state insurance agency and see if they can be of any help, or/and contact an attorney. Is there a particular type of attorney that handles life insurance cases? Thanks again, Johnny
 
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