Can You Be Forced to Accept Early Pension Benes While on Ltd?

[scagnt83]

So basically in your opinion I'm screwed.

You really dont know if your screwed or not yet.

Can you copy the exact wording of the contract in the section that covers pensions?


Your first step is to call Cigna and get some real answers straight from them.
At the end of the phone call ask if you can email them with follow up questions, and get an email address. Then ask your questions again via email and get a written response for your records. (this puts them on the record officially)

But just call them and ask.
It is better than getting worked up over a bunch of guesses.
And I wouldnt talk to a lawyer until you talk to Cigna. They are easy enough to call, it might take 30 minutes max.
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Great, all my financial planning out the window. Really feel great now.

If that does turn out to be the case sorry to be the one who had to break it to you.

Unfortunately most workplace LTD Policies just dont have as rich of benefits that an Individual LTD Policy has.

Disability policies are usually the weakest point in a persons financial plan/protection.

Whenever a person tells me they have "really great and really cheap DI through work" red flags start popping up all over in my mind.

 

[jay123]

I'll copy that language this weekend.
I am worried calling Cigna, I don't want to push the issue at all until they ask for info. The letter I got I was cc'd on a letter to my old company.
I had a settlement offer from them I turned down, should have taken it!
Thanks!

 

[Josh]

So basically in your opinion I'm screwed. Great, all my financial planning out the window. Really feel great now.

Not intending to sound harsh, sometimes "life happens". Your financial planning in the past has at least to some degree helped you prepare for this. At this point I'm sure you wish you may have spent more time reviewing disability policies and opted for one with higher benefit levels, but what you have is better than nothing. You also do have a pension you'll be able to collect on which is more than a good number of folks have, so that's also working to your advantage.

Admittedly we know very little about your situation, but from the tough love department I would imagine your financial decisions (if they're anything like the majority of other Americans) probably included more spending and less saving than was in your best interest. Even know you could probably make some adjustments that might be unpleasant, but could help you avoid having more serious problems 10, 20, 30 years from now.

 

[jay123]

As a truly disabled person I disagree with you, I did study the policy and thought I was covered - never thought an insurance company would force me to start my pension early so they could save money while screwing me, assuming they are going to do that.
When I had to go on disability I worked with a planner, we did put together a very tight plan which I hoped I could live with. Losing a good portion of it after age 65 is going to be very difficult. It does make the pension basically worthless, it will be well under rent or even gas and groceries for a month.
Just doesn't seem right that they can force me to do something that is economically very stupid for me.
Hopefully I am worrying about nothing, but I do tend to plan ahead (lol) so I am trying to get a good start on this.

 

[scagnt83]

I am worried calling Cigna, I don't want to push the issue at all until they ask for info. The letter I got I was cc'd on a letter to my old company.

That is not the right train of thought. You calling is not going to change anything on their end. Obviously the ball is already rolling on this issue. And they are already asking for info about the situation. Its just that you have no relevant info to give them. So they ask your old employer and CC you to inform you of it. They have let you in on the fact that this might be an issue.
They are not going to suddenly speed up the process or be more stringent just because you call and ask a few question. That is not the way insurance companies work.
You need to be in front of this issue. Not behind it.

I cant stress enough how important it is for you to call Cigna and ask for an explanation about the letter/situation.

 

[LGilmore]

thought just occurred that this is normal OP for group di. All DI group policies have a clause that allows the DI company to come in and review the case at any time after 2 years. They may just be doing that. They may be throwing an offer out to see if you'd bite, doesn't mean they can necessarily force you to accept.

They also have to operate under the rules of your state's insurance commissioner's office, whom you should call and talk to about it as well. This carrier doesn't want to piss off the OIC as they could be fined and have sales suspended. The OIC is a free option if you need some help.

 

[scagnt83]

As a truly disabled person I disagree with you, I did study the policy and thought I was covered - never thought an insurance company would force me to start my pension early so they could save money while screwing me, assuming they are going to do that.
When I had to go on disability I worked with a planner, we did put together a very tight plan which I hoped I could live with. Losing a good portion of it after age 65 is going to be very difficult. It does make the pension basically worthless, it will be well under rent or even gas and groceries for a month.
Just doesn't seem right that they can force me to do something that is economically very stupid for me.
Hopefully I am worrying about nothing, but I do tend to plan ahead (lol) so I am trying to get a good start on this.

Here is the thing about all of this.
I do feel sorry for you and your situation.


First. The insurance company is not forcing you to take an early pension.

They are simply abiding by the terms of the contract that you agreed to and claimed to have read and understood.

An insurance contract is a legal contract. And they have built a business model around the terms of their contracts.

For you to expect them to pay benefits that are not covered under the contract, would be the same as them expecting you to pay extra premiums that you did not agree to.


A disability policy is designed to provide income when you have no other means of income. Since you now have other means of income, this particular policy lets that source of income take over.

There are other workplace policies on the market that dont do this. But they are also probably about 50% more expensive than your policy was when you paid premiums.


Is it Cigna's fault they have a crappy LTD policy? Yes and No.
Yes because they designed it. No because there is huge market demand for crappy LTD policies.

That might sound odd. But you can blame it on consumers. Most people refuse to pay 5%-10% of their salary for an individual DI policy.
Many workplace policies are 1% to 2% of salary and have very weak benefits.

But because employees expect "cheap insurance" from their job, they balk at anything over $30 or $40 per month.
So they end up getting CHEAP insurance because its the only thing the majority of a company will sign up for.

Basically consumers shoot themselves in the foot by being cheap. When it comes to disability policies; you really do get what you pay for.


Cigna is a Health Insurance company first and foremost. They are not known for having a high quality long term disability policy. Back when I was active in the group ltd market Cigna would have been one of the last companies on my list of carriers to offer.

Your employer most likely had Cigna Health Insurance and it was just easy to check yes to the LTD option in the paperwork as opposed to shopping the market.

This is a problem with some employers. They do whats easiest and not what is best.

If you do happen to consult with a lawyer, I would ask about state laws regarding the due diligance of an employer in selecting employee benefits.

Did the company knowingly choose a DI policy that terminates upon the opportunity of an early pension, when they knowingly offered a pension with benefits available before age 65?
Where they aware of this? Did they consider alternatives that did not have this clause? (not all do)
Those would be some great questions for a lawyer in my non expert legal opinion.


But at the end of the day you did agree to the contract.
You say that you never thought an insurance company would do that... but you also claim to have studied the policy which stated thats the way the policy works...

The problem is that you are not an insurance agent and have no training or experience to know if that is a good policy or not.

If you had consulted an experienced independent agent and allowed them to study the policy they could have properly explained it to you and suggested better alternatives.

Also, while I understand the need to consult a planner after becoming disabled. This is a perfect example of why people should consult with a planner before their sh#t hits the fan.
A qualified planner or even just an experienced independent insurance agent very easily could have reviewed that DI policy and told you it was not a strong policy.

Now you say you consulted with a planner after becoming disabled.
Did this planner review your DI policy? Obviously not since this is coming as a surprise to you...
Since the DI policy is your main source of income until age 65. And I assume his "plan" called for the DI policy to pay until age 65.
Why didnt he review the DI policy (the main source of income) and ensure that it was going to do what you thought it would?

Who was this planner? A lawyer? CPA? CFP? Insurance agent?

It sounds like a huge piece of the planning puzzle was not properly reviewed by your planner. You could have been preparing for this since day one of disability if they had done their due diligence and properly reviewed the policy...

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thought just occurred that this is normal OP for group di. All DI group policies have a clause that allows the DI company to come in and review the case at any time after 2 years. They may just be doing that. They may be throwing an offer out to see if you'd bite, doesn't mean they can necessarily force you to accept.

They also have to operate under the rules of your state's insurance commissioner's office, whom you should call and talk to about it as well. This carrier doesn't want to piss off the OIC as they could be fined and have sales suspended. The OIC is a free option if you need some help.

Exactly. It could very well be nothing. But until he calls Cigna he wont know.

It kills me how people will spend hours online researching something for their policy when they could just spend 15min on the phone with the "big bad insurance company" ...


The OIC can know what they are talking about and sometimes they dont. I have had some downright scary conversations with people at the scdoi.

But if the contract language says it, then it is legal; because the OIC approved that product for sale.

 

[Josh]

As a truly disabled person I disagree with you,

While I also feel sorry for your situation, what you're telling us is that you've nearly reached the end of your working years and if this policy pays out differently you're going to have serious financial problems. It seems as though you're in the same situation most Americans are and that you did not plan for your future as well as you may have thought. By the end of your working years, if you had prepared financially for it, how this policy pays out would not be as devastating as it appears it's going to be.

To be clear, I'm not intentioning to criticize your decisions, only reflecting on the comment

Great, all my financial planning out the window.

The real financial planning before this would have made your current situation much less of an issue. Either way, I wish you the best.

 

[Full Throttle]

You don't know anything until you call and get a copy of the contract from Cigna. However, there is some reason they want to know about your pension options, or they would not be asking.

 

[jay123]

.....


But at the end of the day you did agree to the contract.
You say that you never thought an insurance company would do that... but you also claim to have studied the policy which stated thats the way the policy works...
...
Also, while I understand the need to consult a planner after becoming disabled. This is a perfect example of why people should consult with a planner before their sh#t hits the fan.
....

I have a progressive disease that I worked through for many years. I did consult a planner before I needed disability (CFA) . We all assumed since the policy said until age 65 that they wouldn't request us to do the early retirement option. We did a very thorough job planning this taking everything we could think of into account.

I met the end of my working years about 5 years ago, I didn't just go on di.

I will call cigna monday, and if needed I will call the state oic, two good ideas.

In the end, I thought we researched it well but never factored in the early retirement 'option', because I never planned to use it and didn't think I would be forced into it. It's not specifically mentioned in my policy, 'pension' is the only thing mentioned. I have been eligible for the early retirement option for 3 years but it was never brought up. I knew about offsets (my ssdi is an offset on the policy).