ABC 13 Special Report - Cancer Insurance: Policy of Confusion? - WSET.com - ABC13

ABC 13 Special Report - Cancer Insurance: Policy of Confusion?

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Montvale, VA - For decades there were a lot of laughs in Helen and John Mills' Montvale,VA kitchen.

Now their daughter, Karen Bivens, sits in their empty kitchen surrounded by stacks of insurance papers.

"I lost my dad October 9, and my mother October the 19 (of 2013)," Bivens said.

Her mother was diagnosed with cancer last year on Mother's Day.

"She decided to go through chemo," Bivens explained. "To hopefully stop the cancer or keep it from growing... which it didn't."

Her parent's cancer policy, purchased through Legionnaire Insurance Trust Program and a company called Life Insurance Company of North America, was supposed to help pay for her mother's treatment in Baltimore.

The family started filing claims at the end of June last year.

"They started sending notices about the information that they needed," Bivens explained. "After 120 pages (that she provided to them), between itemized doctor's bills, hospital bills, I just feel like these letters, these constant letters to me, they're just floating the policy claims in hopes that they don't have to pay anything."

Finally, after months of back and forth, Bivens contacted the Virginia Bureau of Insurance, part of the State Corporation Commission, and filed a complaint.

ABC 13 News spoke with Ken Schrad with the SCC about how long it should take to get a check from an insurance company.

"Virginia insurance law does expect insurance carriers to not take an inordinate amount of time to pay claims," Schrad said. "If all of the paperwork is there and correct and the terms of the policy say it should be paid, than that should happen in a relatively short time period, certainly not more than 30 days."

It took Bivens nearly six months before she got fed up and filed a complaint with the bureau, dated December 23rd of last year.

She's not the only one filing a complaint.

"The bureau dealt with 3000 complaints and of those 3000 complaints. That was over a two year period. I think 14 of those involved cancer policies," Schrad said.

Of those 14 complaints Schrad said in half the cases the insurance company was right.

In the other seven cases, the insurance company either realized it made the mistake and paid the claim or it led to a negotiated settlement.

The Virginia Bureau of Insurance said one of the 14 complaints specifically was about a cancer policy through Life Insurance Company of North America.

"The company position was overturned, and they were required to comply with the stated terms and conditions of the policy," Schrad explained.

ABC 13 News called the 1-800 number on Biven's parent's policy. We were referred twice to another person.

Finally, we got some answers from Dale Chapman, the trust director of Virginia's chapter of the American Legion.

Chapman explained that the Legion has been "endorsing" the Legionnaire Insurance Trust in Virginia since the 1990s.

He said they actually endorse a policy from Life Insurance Company of North America, backed by Cigna.

Chapman went on to say the policies are sold to veterans through the mail.

Chapman hadn't heard of Biven's complaint prior to our call, and he said in his 13 years as trust director he can only recall a handful of complaints.

Someone has been complaining in another state, though. In 2012 Massachusetts Attorney General Martha Coakley alleged Life Insurance Company of North America was marketing its cancer and surgical insurance through improper tactics to more than 1,000 Massachusetts veterans.

The AG's office contended the company was misrepresenting its insurance as a governmental veterans' benefit, exaggerating benefits and misrepresenting coverage limits to name a few.

Life Insurance of North America agreed to pay $1.7 million to consumers and the Commonwealth in a settlement.

Andy Matthews and Brad Weaver don't sell cancer policies, but they are insurance agents with good advice when it comes to protecting yourself in the market.

"They serve a purpose when used properly and they are horrible when used incorrectly," Matthews said. "So it's just a matter of sitting down with a professional you trust and getting some professional advice."

They warn to be leery about someone calling, mailing or ads that pop up on the internet marketing cancer, heart or critical care policies.

"What they might not disclose to them fully are exclusions or be careful you don't do this or do that. Don't expect it to do this or do that," Weaver said. "It could be very disappointing, very disappointing."

Bottom line, talk to a professional before you buy and do a lot of homework.

"That is the very advice we want Virginia consumers to understand," Schrad said. It may look like a good plan, but who's the insurance company? Call the Bureau of Insurance and find out if the company is licensed under Virginia insurance law. Or if you are dealing with an agent or broker you should find out if that agent or broker is licensed under Virginia Insurance Law."

As for Biven's concern that her parent's insurance company was giving her the run around, Matthews seems skeptical that is the case.

"Unfortunately in some cases this individual may be circumstance to someone not paying attention," Matthews said. "I doubt seriously it is insurance protocol to hassle someone over signatures or something my guess is that, like anything else in this world, someone not paying attention has caused someone some ongoing issues."

"I guess the reason I wanted to talk about this is I want people to be aware and to be careful and ask questions if you decided to purchase one of these supplemental policies," Bivens said.

Right around the New Year, Bivens finally got something in the mail: a $2000 check from the insurance company.

She contacted the company and they said that is all they plan to send.

"The sad part about it is that they (her parents) never received a cent before they died," Bivens said.

The beginning of February 2014 Bivens got a response from the Virginia Bureau of Insurance. They stated that Virginia has no jurisdiction over this policy because Life Insurance Company of North America is licensed in the District of Columbia. Now her complaint has been forwarded to the Maryland InsuranceAdministration. Bivens said she's not going to give up.

"They've made me mad," Bivens said. "I know my parents paid their bills on time and they took this policy out in good faith. So I was determined not to give up."

More good advice from our experts: if you buy any kind of policy sit down and write what they call a "love letter" to your family.

Outline what you have purchased, who you bought it from, the company and what is expected during the claim process: everything your loved one needs to know in case they need to do the work to collect.

It is important to do your homework BEFORE you buy a policy.

The National Association of Insurance Commissioners has a consumers' guide to cancer insurance on its website here (the Shop Insurance Smart section on the right side of this web page for a link to that PDF file).

The Virginia Bureau of Insurance has consumer guides and brochures for different lines of insurance, free of charge and available on the Bureau's website that will help you understand better what they are purchasing .

As for the complaint process, it is well explained on the following on this website.

If you'd like to search an agent or insurance company to see if they are licensed in Virginia click here.

This link has  a list of numbers for consumers who have questions for the Virginia Bureau of Insurance.

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