Navy man's widow sues insurance giant for his full death benefits

Philadelphia Daily News ^ | May 2, 2013 | MENSAH M. DEAN

[ConservativeStatement]

WHEN NAVY PETTY Officer Jeffrey Ferren died of a heart condition last year, his widow, Gabriella Kubinyi, believed she would at least be taken care of financially.

That's because as a member of the U.S. armed forces, Ferren, 31, of Camden, had life insurance through Prudential Insurance Co.

But Kubinyi's grief at losing her husband in April 2012 was only compounded when the Newark, N.J., insurance giant told her that she would not be receiving his full $400,000 death benefit.

The insurer said a clerical error had resulted in the wrong amount being deducted from her husband's paychecks, therefore she would not get the full benefit amount, according to attorney Aaron J. Freiwald, who yesterday filed a lawsuit against Prudential in Philadelphia Common Pleas Court.

[ConservativeStatement]

How abnormal a situation is this?

[Mr. K]

I think this falls under YOUR MISTAKE not mine

Pay up

[FormerLib]

I think you’re right. If she acted in good faith, they need to step up.

[neodad]

Their fault. They’re going to have to pay. Save the lawyer’s fees...

[OneWingedShark]

> I think this falls under YOUR MISTAKE not mine > > Pay up Yep; to do otherwise would encourage corruption -- the insurance company would have incentive to bribe the clerks to have the wrong amount taken out as a matter of standard practice so that they would never be obligated to pay the full amount.

[Slyfox]

How many people will not chose Prudential because of this? Probably more than $400,000.

[luvbach1]

IMO Insurance companies are largely legalized rackets. As such they will weasel out of paying whenever and however they can.

[coloradan]

“Oh, we’re sorry, we just discovered that we undercharged you by one penny in 1983, so, no benefits whatsoever as the time for correcting the error has elapsed.”

Some day.

[Ouderkirk]

Insurance is legalized gambling.

I’m betting them (my premium) I’m going to die, crash etc. They’re betting me (the face value of the policy) that I won’t.

They are welching on a bet. That they didn’t properly validate the bet, does not absolve them of the liability for the face value of the bet.

[swamprebel]

Prudential is an excellent company, but as a public company they have fiduciary responsibilities to their stockholders by law. This is a very foolish and shortsighted decision on their part. In most instances when an incorrect age results in lower premiums being paid during the course of a contract, the premiums that should have been paid are deducted from the face amount. In this case an incorrect premium deduction is really the same scenario. I suspect the final outcome here as well will be to deduct the correct premiums from the $400K. The time it takes to sort this out will result in an interest payment to the beneficiary from the date of death of the insured, that will be at approx. 8%.

[swamprebel]

acctuaries are a bothersome bunch, calculating the cost of assuming the risk of death of an insured is a mathamatical formula, but the company has two options here, one is to pay the amount of insurance the paid premiums would have purchased(probably cheaper for the company), or to deduct the correct premium from the $400K, with some publicity I predict they will have to do the latter, and the balance will ultimately be paid to the beneficiary.

[Hugin]

Prudential is an excellent company, but as a public company they have fiduciary responsibilities to their stockholders by law.

Prudential is a mutual insurance company. As such they have no shareholders. The policy holders are the "owners".

[Hot Tabasco]

How abnormal a situation is this?

It all depends on who wants to claim the life insurance policy and how much it's for..

From my own personal experience, I had contributory life insurance thru my company and I knew exactly how much I was supposed to pay and how much the policy was for.

Putting the sad factor aside, I have to side with the insurance company on this one. Our military personnel are not stupid and this soldier knew they weren't taking out enough money for the policy he wanted. That's his fault........

[swamprebel]

Prudential Life is owned By Prudential Financial Inc. and is listed on the NYSE as ‘PRU”.

[swamprebel]

Click on the “our company” tab:
http://lifeinsurance.prudential.com/view/page/iliconsumer/393

[Sooth2222]

"Prudential has evolved from a mutual insurance company (owned by its policyholders) to a joint stock company (as it was prior to 1915). It is now traded on the New York Stock Exchange under the symbol PRU. The Prudential Stock was issued and started trading on the New York Stock Exchange on December 13, 2001."

When I was in school and the company was still mutual, one of my professors described Pru as a "giant, unguided missile". I have no great love for the company. But who, exactly, was responsible for deducting the correct amount from each paycheck? Pru or the US Navy? If the Navy screwed this up, shouldn't they be responsible?

[luvbach1]

Insurance is legalized gambling.

I agree it is that, too, when it is operated ethically. It's a racket when, as so often happens, it weasels out of paying.

[SandRat]

Hope the Navy Chief Petty Officer’s Association takes them to task. In fine CPO to boot style.

[editor-surveyor]

Insurance is organized crime.

[RedMDer]

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