Health Insurance Company to Pay $1.7 Million to Massachusetts Veterans

Massachusetts veterans

Some Massachusetts veterans may receive a payout from Life Insurance of North America after the health insurance company agreed to pay more than $1.7 million. The sum is intended to settle allegations that it used deceptive tactics to market cancer and surgical insurance to its customers.

Life Insurance of North America Accused of Deception

Life Insurance of North America has been ordered to pay consumers and the Massachusetts state government to settle allegations that it used deceptive marketing practices on more than 1,000 Massachusetts veterans living in the state.

In a complaint filed by Attorney General Martha Coakley’s office, the health insurer allegedly misrepresented products as a government benefit for veterans, while illegally denying coverage based on pre-existing conditions.

The insurer was also accused of making false claims about rates, exaggerating benefits and misrepresenting coverage limits. The consent judgment containing the settlement was filed on Monday in Suffolk Superior Court.

Massachusetts Veterans to Receive Payout

Under the terms of the consent judgment, Life Insurance of North America will be required to reimburse impacted Massachusetts veterans, many of whom fought in World War II, a minimum of $650,000.

The company is reportedly also required to pay more than $1 million to the state government to cover civil penalties, promote programs that will assist veterans, as well as pay for the cost of the investigation.

Life Insurance of North America has offered supplemental health insurance to Massachusetts residents since 2007, including a hospital indemnity policy offering outpatient surgical benefits and a cancer-only policy. But the marketing tactics, often through direct mail and internet solicitations violated the state’s Consumer Protection Act, according to the attorney general’s complaint.

Reports say the insurance company has moved to terminate their products in Massachusetts.