GMA Life Insurance Claim – Video Transcript (Aug. 2009)
[GRAPHIC: Gets Answers]
DIANE SAWYER: So it’s GMA Gets Answers.
[GRAPHIC: Gets Answers]
[GRAPHIC: GMA Gets Answers]
DIANE SAWYER: Again, Chris is back because we all count on life insurance to be there for our families after we’re gone. And you found a family getting the runaround. Went into action.
CHRIS: Absolutely. And not just the runaround, there was a refusal to pay here. Now we all know about life insurance and we all know that it’s become even more important in these tough economic times because families are trying to secure their future. So when people, like the family you’re about to meet, play by the rules and then those rules change, it’s time to get answers.
CHRIS: Suwara Faruque was the kind of mother who would do anything for her family.
TANIJA FARUQUE: She always encouraged me and gave me that push, you know.
CHRIS: For seven years, Suwara worked at this 7-Eleven store in Boynton Beach, Florida, earning about $15,000 a year. Saving very penny she could for her kids’ college education. And she made another investment in their future as well.
[GRAPHIC: Mother and daughter]
CHRIS: Every two weeks she paid $36.50 toward a life insurance policy offered by 7-Eleven.
TANIJA FARUQUE: The life insurance that, that she had, you know, it was, it was for us, you know, god forbid if something happened to her.
[GRAPHIC: Mother and daughter]
CHRIS: Then in the spring of 2007, Suwara was diagnosed with advanced colon cancer.
CHRIS: After a nine-month battle, she was gone.
TANIJA FARUQUE: And then the nurse is like, your mom stopped breathing. And that’s when I knew that she, she passed away.
CHRIS: But for Suwara’s family there was a second blow to come.
CHRIS: When they tried to collect their mother’s $45,500 policy, they got a shock from a company hired by 7-Eleven to handle employee benefits. The company is called ExcellerateHRO.
[GRAPHIC: Mother and son]
CHRIS: And told the Faruques their mother’s life insurance policy was canceled because she didn’t pay the premiums while out on sick leave. That meant Tanija couldn’t realize her mother’s dream for her to go to college.
TANIJA FARUQUE: 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.
[GRAPHIC: Insurance policy]
CHRIS: But take a look at this. The administrator was wrong. There’s a clause in Suwara’s policy clearly explaining if you can’t work because of a medical condition, you don’t have to pay your premiums any longer and you still remain covered.
CHRIS: For nine months, the desperate family tried to get help from 7-Eleven, and for nine months they were ignored.
ALICIA PAULINO-GRISHAM: 7-Eleven abandoned the Faruque family and they disregarded the wishes of their employee.
[GRAPHIC: Woman and man]
ALICIA PAULINO-GRISHAM: The reason that she was paying for coverage was because she wanted to protect them and they didn’t care.
CHRIS: Sandy Praeger just completed her term as president of the National Association of Insurance Commissioners, which protects consumers who deal with insurance companies.
SANDY PRAEGER: So…
CHRIS: Now if people hear this story and they say, well, the Faruque’s, that’s sad but they’re the exception to the rule, this would never happen to me.
SANDY PRAEGER: Well, it happens.
CHRIS: Here is a big reason why, a federal law called the Employee Retirement Income Security Act, ERISA.
CHRIS: It shields companies like 7-Eleven and third-party administrators from punitive damages in lawsuits, giving companies little incentive to do the right thing.
CHRIS: What is the incentive for a company to say; oh we’ll do this differently and better even if it costs us money? What’s their incentive when really they can’t be punished for it?
SANDY PRAEGER: Well their only incentive would be wanting to keep good employees. They are insulated. The ERISA pre-emption does insulate them from, from really effective regulation.
CHRIS: And despite best efforts, even something as troubling as the treatment of the Faruques doesn’t usually allow state regulators to take action. You can’t just say what’d you do with the Faruques. You need a pattern. That’s not easy to establish.
SANDY PRAEGER: That, that’s right. And, and establishing the pattern relies on employees complaining and oftentimes they don’t. And oftentimes they don’t get the benefit because they just throw up their hands and say well there really isn’t — I have no recourse.
CHRIS: But the Faruques would have a different ending to their story. They reached out to us.
CHRIS: We called 7-Eleven about the policy mistake.
CHRIS: The company refused our request for an on-camera interview but sent us a statement acknowledging the mistake and apologizing for the miscommunication and misunderstandings.
CHRIS: More importantly, less than a week after we started making calls, the Faruques received a check for $45,500. So now Tanija and her brother can go to college. But she says her mother deserved better from 7-Eleven.
TANIJA FARUQUE: My mother, she was a very hard worker, very loyal, very honest. After she died, this is how they repay her.
CHRIS: So the good news is the Faruques finally got their check but it did take a nine-month fight. So how do you not let this happen to you? Here are some tips.
When dealing with a third-party administrator, and there are a lot of ones like the one you just saw in this study — story, don’t assume they understand how your policy works. Even you are told you are not covered, just as the Faruques were told, demand a copy of the policy anyway and make sure you get an application form to apply for your benefits.
And also, you want to make a request to speak directly to your insurance company. Different people than the third-party administrator. Now, when we called, Diane, clearly it makes a difference when Good Morning America gets involved, no question about that. But the lawyer in this case made a difference for this family.
DIANE SAWYER: And again, that sentence in there that says if you are ill and can’t pay your premiums, then you still have your life insurance.
DIANE SAWYER: A key sentence.
DIANE SAWYER: Okay, thanks. And of course we’re going to have a GMA Gets Answers segment every Wednesday this month. If you have a story you’d like the Gets Answers team to look into, send it to us. Email at ABCNews.com.