News Release
US Department of Labor reaches settlement with Lincoln National Life Insurance Co. to reform its evidence of insurability practices
RADNOR, PA ‒ The U.S. Department of Labor announced a settlement with the Lincoln National Life Insurance Co. that requires the company to change its evidence of insurability requirement – commonly known as proof of good health –for participants in job-based life insurance plans. The settlement forbids Lincoln from denying a beneficiary’s claim based on the lack of evidence of insurability if premiums have been received for three months or more.
The settlement follows an investigation by the department’s Employee Benefits Security Administration that determined Lincoln denied life insurance to participants’ beneficiaries after accepting premiums for months or years without obtaining evidence of insurability from participants. When beneficiaries filed numerous claims after plan participants’ deaths, Lincoln denied these claims based on the participant’s failure to provide evidence of insurability, leaving beneficiaries without insurance benefits for which their loved one had paid.
“Workers pay premiums believing they will receive their promised benefits,” said Assistant Secretary for Employee Benefits Security Administration Lisa M. Gomez. “Once workers pay these premiums, life insurance companies must verify that plan participants satisfy eligibility requirements. EBSA will not allow companies to neglect their responsibility for making timely eligibility determinations, collect premiums for months or years and then deny payment of death benefits to beneficiaries because the company failed in its legal responsibility.”
The settlement also requires that Lincoln may only request evidence of insurability from existing participants within the first year of them paying premiums. Lincoln cannot consider a participant’s health condition if it arose after the date of Lincoln’s first receipt of the participant’s premium payment. These requirements apply to Lincoln National Life Insurance Co. as well as its parent company, Lincoln National Corp. of Radnor and Lincoln Life & Annuity Co. of New York, another subsidiary of Lincoln National Corp.
Lincoln has advised the department that the company voluntarily reprocessed claims dating back to March 2018 to provide benefits for claims denied based solely on a participant’s failure to provide evidence of insurability.
This settlement follows similar agreements the department reached in September 2023 with United of Omaha Life Insurance Co., Prudential Insurance Co. in April 2023 and Unum Life Insurance Co. of America in May 2024.
Lincoln Financial Group is the marketing name for Lincoln National Corp. and its affiliates. As of Dec. 31, 2023, the company serves approximately 17 million customers in its annuities, life insurance, group protection and retirement plan services.
Attorney Dana M. Hague in the department’s Office of the Solicitor in Kansas City, Missouri, negotiated the settlement. EBSA’s Kansas City and Philadelphia Offices conducted the investigation.
