John Hancock Life Insurance Faces Lawsuit on Unpaid Life Insurance Benefits

John Hancock Life InsuranceJohn Hancock Life Insurance is being accused of failing to pay life insurance beneficiaries due payouts over a period of years, according to a new story from the Boston Globe. One beneficiary has filed a lawsuit against the Boston insurer, alleging that it routinely checked to find out whether annuity holders died in order to halt payments, but failed to find out if policyholders have passed away to promptly pay benefits from life insurance policies.

John Hancock Life Insurance Fails to Pay

Richard Feingold, the son of a deceased policyholder of John Hancock Life Insurance says the company failed to seek him out for payment after his mother died 2006. She had purchased a small contract life insurance policy in 1945 and made payments until the company said it stopped collecting premiums for life insurance policies in 1985.

Feingold had no idea that his mother had purchased a policy and only began to inquire after he discovered that he may have been owed $459 in dividends from John Hancock via the Illinois treasurer’s website for unclaimed property.

After inquiring directly with the insurer, it eventually sent him $1,379.41. But he complained that the company refused to provide him with details of his mother’s policy or an explanation of the benefits he’d received.

Delay of Beneficiary Payments for Life Insurance Policies Leads to Lawsuit

Last month, Feingold filed a lawsuit that may soon become a certified class action lawsuit against John Hancock Life Insurance, stating that the company consulted the Social Security Administration’s master death list regarding annuity clients’ deaths, but never checked the same database to learn about the deaths of its customers who have life insurance policies with the company.

In other words, the suit claims the company and its subsidiaries have used the data from the list “solely for their own advantage.”

Because Feingold has never received an official copy of his mother’s policy, his attorney Brian J. Wanca says he is still not sure whether the company has paid him the full amount owed. Wanca also believes that many other individuals across the country are owed life insurance benefits.

John Hancock Life Insurance has already agreed to a $13.3 million settlement with six states over its failure to consult the Social Security Administration death list for other policyholders. Other insurers, including AIG, MetLife and Prudential have reached similar settlements over the past year.

Hancock has asked the court in the Feingold case to dismiss the suit, stating that Massachusetts consumer protection laws do not apply to out-of-state-residents like Illinois-based Feingold, however, a judge has yet to rule.

(Image courtesy of Kittisak / FreeDigitalPhotos.net)