Principal Financial Group Long-Term Disability Policies Are A Consumer Nightmare And A Rip-Off!
IOWA -- I purchased and paid on a group coverage employee benefit long-term disability policy through Principal Financial Services for years. When PFG first approached my company to offer their financial services products, my employer really leaned on all the employees to take out this company's LTD policy coverage because the company needed at least 15 employees to enroll in the plan in order to have PFG LTD coverage in the first place; and, the more employees who elected to buy LTD policies from PFG, the lower the monthly premium costs would be for each individual employee enrolled.
I was one of the first employees to elect to take this coverage. Having been a single parent for years, I was always worried about what would happen if I became disabled and couldn't work. Then the worst happened in 2007 and I became totally disabled. I had my short term disability policy through Aflac. When I applied for these benefits, they paid me promptly. I then applied for, and received, my social security disability benefits. They were very quick to approve me within 4 months of my initial application online. But I have yet to collect one dime on my Principal Financial Group LTD policy! No one tells you when you sign up and pay for this type of coverage that all group insurance benefit policies are governed under the federal ERISA laws. Group policies are not regulated by the insurance laws in your individual states which would offer the consumer more protection.
The ERISA laws were originally drafted to protect the consumer and to compel the insurance companies to process claims quickly, in 90 days or less. Sounds good; but, in reality, the ERISA laws have so many loopholes in them that protect the insurance companies, not the consumer, that insurance companies can drag out paying on a group coverage claim for a very long time. There are no provisions in the ERISA laws for a consumer to get punative damages from the insurance company if they willfully keep denying a claim for the most ridiculous of reasons; and, you can't get any interest on the money they owe you if they withhold paying you for years and years. The ERISA laws actually work to the insurance companies Advantage if they drag out paying their LTD claims for as long as they possibly can.
Even with an attorney to fight for you, the insurance companies know that they can play this game for a good long time. There is nothing anyone can do about it unless and until you go to court to collect. And ERISA attorneys will take 30% to 50% of your back benefits when you do eventually collect. Remember that! An attorney has every motivation to drag out an ERISA claim for as long as they possibly can also! Dragging out the processing of your ERISA claim just increases the percentage of their contingency fee! So now whose really looking out for the consumer's interest? Nobody! I am almost 2 years down the road trying to collect on my LTD policy from PFG. My attorney tells me they will make me a lump sum settlement offer after all the claims and appeals processes are over and right before we are due to go to court.
Meanwhile, expect to be followed around by a PFG paid private investigator who will attempt to gather photographic "evidence" to dispute your claim. What ever "evidence" they do manage to collect on you will be used against you later to intimidate you into taking a small "settlement offer". Of course the settlement offer is only a fraction of what you would collect if PFG were to actually pay you the promised monthly disability benefits (until age 66, which is all your covered for under their policies). At age 66 you fall back on SSA benefits only and PFG will cease to pay. A disability policy is not the same as a retirement policy, keep that in mind.
Did I mention PFG also makes you assign all your monthly SSA checks over to them until age 66 IF you are so lucky as to actually collect a monthly benefit check from them? Reduce the monthly benefit amount showing on your policy by the amount of SSA benefits you would or do receive. That's the actual dollar amount PFG would pay you, if you ever get paid anything at all. If you take the settlement offer, which most people do after all this grief, they'll make you sign a gag order so that the length of time it took for PFG to settle your LTD claim will never be a matter of public record. That way, when consumers try to determine PFG's track record on their claims, and the time it took to actually process and pay on PFG claims, the public record will look like all PFG claims were processed and paid within the 90 days allowed by ERISA law.
Pretty sharp, huh? They have some great attorneys working for them. And, from what I see on the internet, PFG spends the most lobbying dollars of any insurance company you could choose out there with similar products to ensure that our lawmakers never close up the loopholes in the existing ERISA laws. Beware Principal Financial Group LTD policies. In my opinion they are not worth the paper they're written on.