The US Department of Labor has come to an agreement with Lincoln National Life Insurance Co. to improve its processes for verifying evidence of insurability.

The U.S. Department of Labor recently announced a settlement with Lincoln National Life Insurance Co. in Radnor, PA. This settlement requires the company to change its evidence of insurability requirement for participants in job-based life insurance plans. This requirement, also known as proof of good health, has been a common barrier for beneficiaries seeking to claim their loved one’s life insurance benefits.

Under the terms of the settlement, Lincoln is prohibited from denying a beneficiary’s claim based on lack of evidence of insurability if premiums have been received for three months or more. This comes after an investigation by the department’s Employee Benefits Security Administration (EBSA) found that Lincoln had been denying life insurance to beneficiaries even after accepting premiums for months or years without obtaining evidence of insurability from participants.

EBSA Assistant Secretary Lisa M. Gomez stated, “Workers pay premiums believing they will receive their promised benefits. Once workers pay these premiums, life insurance companies must verify that plan participants satisfy eligibility requirements.” The department will not tolerate companies neglecting their responsibility to make timely eligibility determinations and then denying payment of death benefits to beneficiaries.

The settlement also includes requirements for Lincoln to only request evidence of insurability from existing participants within the first year of them paying premiums. The company cannot consider a participant’s health condition if it arose after the date of Lincoln’s first receipt of the premium payment. These requirements apply to Lincoln National Life Insurance Co. as well as its parent company, Lincoln National Corp., and its subsidiary, Lincoln Life & Annuity Co. of New York.

Lincoln has informed the department that it voluntarily reprocessed claims dating back to March 2018 to provide benefits for claims previously denied solely due to a participant’s failure to provide evidence of insurability. This settlement follows similar agreements reached by the department with other insurance companies in 2023 and 2024.

Lincoln Financial Group, the marketing name for Lincoln National Corp. and its affiliates, serves approximately 17 million customers in annuities, life insurance, group protection, and retirement plan services. The settlement was negotiated by Attorney Dana M. Hague in the department’s Office of the Solicitor in Kansas City, Missouri, and the investigation was conducted by EBSA’s Kansas City and Philadelphia Offices.  

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