Around one-third of Americans get their life insurance through their profession but what if purchasing life insurance via an employer goes wrong?

Sarwara Faruque's family found out the answer to this after they were forced to stage a nine month battle to claim the life insurance money their mother had invested for her children in the event of her death.

Faruque worked for a company called 7-Eleven for more than seven years and saved the amount for her children's educational funds. To prepare for the worst, she also paid regular amounts into her life policy offered by 7-Eleven.

However, in 2007, Faruque was diagnosed with advanced colon cancer and died after a month struggle. For the family though, times were to get much harder.

A battle to claim life insurance
When the family tried to collect their mother's $45,000 life insurance policy, the company that handled the cover, Excellerate HRO, denied their claim. The company stated that the policy was cancelled because Faruque did not pay the premiums while out on sick leave.

However, it appeared that Excellerate HRO were incorrect, because a clause in Faruque's policy stated if she could not work because of her medical condition, she did not have to pay her premiums any longer and would still remain covered.

For nine months, the family tried to get help from 7-Eleven but with no avail. Tanija Faruque said: 'We didn't get any answers. We were going back and forth. And they knew, they knew that my mother passed away. And they knew it was a rough time for us.'

Therefore, through desperation the family hired a lawyer to settle the matter. Alicia Paulino Grisham, the family's lawyer commented: '7-Eleven abandoned the Faruque family, and they disregarded the wishes of their employee. The reason that she was paying for coverage was because she wanted to protect them and they didn't care.'

According to Sandy Praeger, former president of the National Association of Insurance Commissioners, third-party insurance providers have little incentive to care.

Praeger said that the federal Employment Retirement Income Security Act (ERISA) safeguards companies like 7-Eleven from punitive damages: 'Their only incentive would be wanting to keep good employees. They are insulated.'

Praeger said the only way for a change is if more employees complained: 'Establishing a pattern relies on employees complaining, and often times they don't. 'They don't get the benefit because they just, they throw up their hands and say, 'Well, I have no recourse.''

Once a TV programme 'Good Morning America' contacted 7-Eleven over the matter, the company sent a statement acknowledging the mistake and apologised for the misunderstandings. Less than a week after the Faruques received a check for $45,000.

Tanija Faruque had the last word: 'My mother was a very hard worker. Very loyal, very honest. You know, after she died, this is how they repay her? No.'

Author: Catherine White

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Catherine has more articles pertaining to life insurance and other insurance related articles.


Article source: Free Insurance Articles.