Question
Is it illegal for Unum to consider every source of income as income except Vetern's Affairs Benefit Compensation?
Here is what I find most likely illegal about Unum’s “payback” policy. They consider every source of income as income except Veteran’s Affairs Benefit Compensation. So, if a person really wanted to fight their income definition in court I would think a Judge would love to hear how Unum counts every income known to man except Veteran Affairs Compensation. This in itself could VOID their contracts, mainly with disabled veterans. What the attorneys here think about this?
Answer
Rob, Unfortunately there is nothing illegal about the way Unum writes their “Other Income” benefits provision. Courts have long held that these provisions are enforceable. Unum’s decision to exclude VA benefits as a source of Other Income is also legal, and regardless of the rationale for doing such I believe is a good thing. Having a benefit reduced by a deductible source of income is often a surprise to the insured, and definitely a point of contention. However, the premiums (if any) that are paid for the coverage are incredibly low in comparison to the premiums you would have to pay should you purchase a private policy that does not contain such language. You get the benefit of the bargain.
