term life

[cecil]

State of VA
My father was 70.5 years old and still working full time.
Hewas offered a deal from his company to get a letter from his Dr stating he was dying of a terminal illness and he would pass before years end.He could be paid up front the term life amount. They would then retire him and hire back as consultant.
I spoke to his Dr asking he call my father who appeared to be in denial.The Dr refused to call my father to confirm that he was dying so my father sought another opinion to confirm.He asked the company not to retire him until second opinion was rendered.
When that happened he advised work he would take the deal.
The day before he died he was hour to hour in the death process.He gave me POA to handle things for him. When I spoke to them they said they would get paperwork in order.
When I arrived they informed me it was no longer 50000.00 but 32500.00 because of his age.
My questions ...
Is this true?
Why would work offer the deal at 50000.00?
Would work be liable to make this right since they did not know this prior too the deal?
What is insurance and HR dept responibilities to their employees to make this info available to them so they may buy additional coverage?
Does ERISSA law govern situations like this?
thank you
cecil

 

[ALawyer]

This seems to involve an accelerated benefits provision that permits ad advance of death benefits for the terminally ill.

My sense is that the policy, by its terms, has a graduual step down provision, say $50k to age 70, reduced by 1/4 at 70, reduced by 1/3 at 75, etc. (That makes it much cheaper for employers.) If they said $50,000 they likely forgot he was 70+, and forgot to take it into account.

Unless you were damaged by their error there is no basis for claim. You don't get more than the policy provides. Also, ask for a COPY OF THE POLICY TO CONFIRM THE STEPDOWN.