• How Does Unum Evaluate a Claim for LTD Insurance Benefits?

Unum’s disability claims handling tactics are exposed in New York Federal Court

Individuals who pay for disability insurance premiums hope to be able to rely on the disability benefits if they are ever unable to work for any extended period of time. However, many times these employees’ claims are denied without any reasonable basis for denial. As in the case below, it is often abusive claims handling tactics by disability insurance companies that leads to disabled individuals being denied their benefits and forced to try and support their families in any way that they can.

John E. McCauley vs. First Unum Life Insurance Company (“Unum”)

Mr. John McCauley was a senior vice president for Sotheby’s Service Corporation when he was diagnosed with colon cancer in 1991. Unable to perform the duties of his occupation, McCauley submitted a claim for long-term disability benefits with Unum in 1994.

First Unum Life Insurance Company denied McCauley’s long-term disability claim in 1995, and stated they did not believe that his medical condition should prevent him from working.  In 1996 he was also denied long-term benefits from a conversion policy he had purchased from Sotheby’s. McCauley filed an appeal with Unum and submitted additional medical support from his treating physician. McCauley’s physician explained that the combination of the cancer and the chemotherapy treatments prevented McCauley from being able to work.

First Unum Life Insurance Company disregarded this additional medical information, despite the fact that Mr. McCauley was clearly and without a doubt suffering from disabilities beyond his control.  Mr. McCauley was left sick, without his disability insurance benefits and with no way to work and support his family.  McCauley filed a lawsuit against Unum in the New York Federal District Court, however the court entered a decision in favor of Unum.

The Appeals Process and How First Unum Continued to Deny Mr. McCauley of His Rightful Benefits

After losing his case at the lower court level, McCauley appealed the lower court’s decision to the   New York Second Circuit Federal Court of Appeals. The appellate court reversed Unum’s denial of benefits and found on December 24, 2008, “powerful evidence that First Unum’s denial of McCauley’s appeal was arbitrary and capricious.” The appellate court took into account “First Unum’s well-documented history of abusive tactics,” and remanded the case to the lower court, with the direction to find in favor of Mr. McCauley and to calculate the benefits owed him.

The Appellate court specifically stated the following with regard to Unum:

“[W]here an insurance company administrator has a history of biased claims administration.” First Unum is no stranger to the courts, where its conduct has drawn biting criticism from judges. A district court in Massachusetts wrote that “an examination of cases involving First Unum… reveals a disturbing pattern of erroneous and arbitrary benefits denials, bad faith contract misinterpretations and other unscrupulous tactics.” Radford Trust v. First Unum Life Ins. Co., 321 F. Supp. 2d 226, 247 (D. Mass. 2004), rev’d on other grounds, 491 F.3d 21, 25 (1st Cir. 2007).

That court listed more than thirty cases in which First Unum’s denials were found to be unlawful, including one decision in which First Unum’s behavior was “culpably abusive.” Also, First Unum’s unscrupulous tactics have been the subject of news pieces on “60 Minutes” and “Dateline,” that included harsh words for the company. First Unum has fared no better in legal academia. See John H. Langbein, Trust Law as Regulatory Law: The Unum/Provident Scandal and Judicial Review of Benefit Denials Under ERISA, 101 Nw. U. L. Rev. 1315 (2007).

In light of First Unum’s well-documented history of abusive tactics, and in the absence of any argument by First Unum showing that it has changed its internal procedures in response, we follow the Supreme Court’s instruction and emphasize this factor here. Accordingly, we find First Unum’s history of deception and abusive tactics to be additional evidence that it was influenced by its conflict of interest as both plan administrator and payer in denying McCauley’s claim for benefits.”

While Mr. McCauley finally received the justice and benefits he should have been entitled to all along, he suffered through 13 years of agony, fighting, and humiliation before he was finally paid disability benefits by Unum.  Through the unreasonable denials and delays of Unum, Mr. McCauley was made to suffer before he was able to continue with his life, receiving the disability benefits he was entitled to. As a disability insurance attorney that represents disability insurance claimants throughout the country, I can tell you that claim denials happen all too often.  However, more court case endings like McCauley’s will continue to expose the conduct of certain disability insurance companies, and hopefully prevent other disability claimants from experiencing unreasonable claim denials.

We want to discuss with you if we can win your Unum disability Appeal. Whether it’s an ERISA appeal or a private disability policy, you only get once chance to submit a great disability appeal.

Comments (4)

  • Diana: We can certainly help. I suggest you contact our office and speak with one of the attorneys to discuss in more detail your circumstances and your options.

    Jay Symonds Oct 26, 2020  #4

  • I need help with a current/pending long term disability claim with Unum. Thank you.

    Diana P. Oct 26, 2020  #3

  • Mary Kay,

    From the information provided, it would seem you may have an argument against their deduction of benefits due to the MD. I have handled similar cases with Unum and the application of SSDI awards. However, each case is very fact specific and if Unum even considered the MD as part of your disability (even if they didn’t indicate it as part of the initial award of benefits) there is case law to support their ability to offset your benefit on account of it. Please feel free to contact our office to discuss how we might possibly be able to assist you.

    Stephen Jessup Sep 26, 2013  #2

  • Hi, I’ve been receiving LTD benefits from Unum for almost 7 years after a fall at work caused my lower back serious injury. I have been unable to return to work since. I applied for SSD immediately and was approved right away based on my muscular dystrophy (genetic). I worked full time with MD for 30 years and never took one day off from it as there was no pain and I could always do my job duties.

    Anyway, Unum granted my LTD based on my lower back syndrome, radiculopathy, etc… (all from the fall at work). Unum then used my workers compensation as deductible source of income (from the fall) to offset my LTD payments, this is fine. In my Unum policy it says, “Unum will only subtract offset income received from the same disability”. So I know my SSD payments should not have been deducted all along. Unum was supposed to remove w/c attorneys fees before offsetting w/c payments, they never did. My benefit was in the negative so I received 10%. Then Unum approved my “plus rider” not affected by offsets. So, here I am 80 months later contacting Unum to reevaluate my benefit calculation. They owe me all SSD payments based on MD that they subtracted from my Lower back injury LTD claim, plus w/c attorney fees, plus interest on all money owed.

    PS: I have correspondence saved from an Unum rep. insisting I file an appeal with SSD administration modifying the basis from MD to Lower back syndrome. I tried too, ultimately SS administration would not do it. I must have had a gardian angel watching over me. Any thoughts?

    Mary Kay Scalera Sep 25, 2013  #1

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