Cigna Life Insurance Dispute Ends in $21K Plus Interest Payout to Widow
by: Jessica Bosari
May 7th, 2014
After dutifully paying the premium on his life insurance policy for 18 years, Alexander Shetsen passed away at the age of 85, knowing his life insurance would leave his wife Khava a small nest egg to help her in his absence. But when Shetsen filed her claim, she was denied.
Widow’s Claim Denied
NJ.com reports that Cigna wrote Alexander’s life insurance policy as part of his employment benefits through the Newark Housing Authority. Alexander had paid about $4,000 in premiums in the past 18 years, so the denial came as a shock to his widow.
On several occasions, the Newark Housing Authority assured Khava the payment was forthcoming. When no payment came, the Housing Authority’s attorney wrote Cigna about the claim, attaching documents showing that the policy was in force and the benefits should be paid. After a few weeks, Shetsen received a denial letter from Cigna. After that, the Housing Authority stopped answering Shetsen’s calls and emails.
Related: New York Insurance Regulator Looks to Lower Life Insurance Rates
Local News Station Provides Help
Shetsen was prepared to accept the denial, even though she didn’t understand it. To find clarity, she contacted a local news station and its service, Bamboozled. After reviewing the documents, Bamboozled contacted Cigna and that changed everything. The family received an apology from Cigna, and a promise of $21,000 plus interest. The promised payment arrived the next day.
If denied life insurance benefits, a beneficiary should look at the appeals process outlined in the life insurance policy. Usually, it involves writing a letter that appeals the denial and includes documents to prove the company’s denial was wrong. It’s not clear why the letter from the Housing Authority was not enough to elicit payment.
If an appeal is denied, the state’s insurance department or attorney general can help. Pressure from one of these agencies should resolve a claim, especially a smaller one like Shetsen’s.
Photo credit: Marcel Oosterwijk