The American Association for Justice (AAJ) conducted a detailed analysis to discover the top worst life insurance companies in America to assist consumers before they have to file a claim.
Court documents, SEC and FBI data, state insurance department investigations and complaints, press reports from throughout the country, and testimony and depositions of former insurance brokers and adjusters were all examined by AAJ.
This article includes a list of the top worst life insurance companies. Before you choose one of these insurance companies, do your homework to make sure they are right for you and can provide you with what you need.
Table of contents
When Should You Hire a Life Insurance Lawyer?
If your life insurance claim has recently been delayed or refused, it is best to speak with a lawyer as soon as possible. Work with an attorney who has at least 15 years of expertise managing life insurance appeals so that you may rest comfortably that he is familiar with the complicated laws that apply.
If your claim is delayed, having a life insurance attorney on your side will help to expedite the often-complicated legal process, allowing you to get your claim granted sooner rather than later. In the event of an outright denial, a life insurance attorney can help you challenge the insurance company’s judgment.
Worst Life Insurance Companies In 2023
Here are the 14 worst life insurance companies:
1. Midland National Life
Midland National Life came in 23rd place out of 24 insurance firms. Except for interaction (3/5) and communication (3/5), they scored below average in every category.
On the Better Business Bureau’s website, they have 28 complaints. Many of them are about communication and cancellation processing delays.
2. Progressive
Next on our list of the top worst life insurance companies is progressive.
You’d think Progressive is a nice, helpful, and customer-focused insurance firm based on its cheerful advertising on television. On the other hand, recent court rulings depict a very different picture.
Progressive has faced many high-stakes bad-faith insurances claims from policyholders and claimants in recent years. While some of these instances have been resolved, others are still being litigated.
Progressive is accused of failing to act quickly enough in some of these situations to pay claims involving serious injuries to children caused by Progressive policyholders. One of these cases was eventually settled for $22 million, while another is still pending and seeks $50 million in damages for Progressive’s bad faith claim processing.
Despite consistently appearing on JD Power’s list of the worst vehicle insurance companies, Progressive generated a net income of more than $5 billion in 2019, up nearly 44% from the previous year. Progressive appears to have left many policyholders out in the cold while raking profits.
READ ALSO: Progressive vs State Farm Insurance: Which is better to use?
3. Brighthouse Financial
J.D. Power gives Brighthouse Financial a lower-than-average score in every category except Communication. Brighthouse Financial is a division of MetLife that specializes in individual life insurance.
They have no reviews, but 39 complaints have been resolved in the last three years (BBB). The majority of them address a policy issue. Some policyholders may have been unaware of certain provisions; read your insurance and understand what you’re getting.
We rank 40+ credible life insurance providers on various criteria (products offered; financial strength; customer satisfaction; consumer complaint; and digital experience).
4. AXA Financial
Formerly known as Equitable, AXA Financial is ranked 22nd out of 24 insurance companies. They only appear to accomplish one thing well, or at least well enough, which communicates costs. Other than that, everything is below par.
There are 20 primarily one-star ratings and 48 complaints on the BBB website. Some customers were dissatisfied with fees and the simplicity with which they might cancel a policy. On the bright side, their rates are reasonable. However, their policies are not as flexible as those of other insurance companies offer.
5. Transamerica
In J.D. Power’s analysis, Transamerica scored worse than average in every category except pricing. They are ranked 21st out of 24 businesses.
This may not appear to be a major issue, but according to the Better Business Bureau, there have been 65 reviews with an average rating of one and a half stars and 376 complaints in the last three years.
The difficulty in canceling is mentioned in some evaluations, and many people complain about inadequate communication. Some remarks included “worst company ever” and “zero help.”
6. AIG
AIG is the largest insurance firm in the world, with CEO Brian Duperreault earning more than $19 million in 2019. The company’s profits continue to rise because it pays out on as few claims as possible.
AIG continues to mistreat its customers with no redress. This company’s executives are accused of attempting to raise prices following a disaster. “The corporation has been nicknamed the new ‘Enron’ because of charges of multi-billion dollar corporate fraud,” according to the AAJ.
Despite several allegations made in both civil and criminal courts, AIG continues to use deceptive practices to maximize profits at the expense of its claimants.
Its internal mechanisms were allegedly designed to maximize claim denials, making it more difficult for applicants to receive payments for legitimate claims. This is true for both personal and business insurance policies.
AIG also has a reputation for not playing by the rules in court, and it has been sanctioned due to its lawyers’ improper methods in discovery and other processes.
When dealing with AIG, be prepared to fight for the payment you deserve by enlisting the help of an experienced legal team.
7. Unum
This is one of the country’s most well-known disability insurers and has a bad reputation among its customers. Unum has a reputation for delaying and refusing claims made to them.
Rick McKenney, the CEO, made almost $9.7 million last year, while disabled claimants were denied benefits.
The media routinely investigates this company for claim abuse, giving them the number two ranking.
Concerning Unum’s claim denials, California and other states initiated investigations and filed claims, and the California Insurance Commissioner referred to Unum as an “outlaw” corporation.
The Ninth Circuit Court of Appeals decided that one rejection violated medical science since the insurance refused benefits and expected a man to continue working against stringent doctor’s recommendations.
This is only one example of how Unum is known for failing to provide claimants with the assistance they need.
After being diagnosed with multiple sclerosis, one of Unum’s employees could not obtain the benefits she required. Despite medical confirmation of her ailment, the company dismissed her claims for three years. Only after she obtained legal counsel did the company relent in this case, demonstrating the importance of having the appropriate lawyer fighting for your rights.
8. UnitedHealth
UnitedHealth’s strategies not only make the firm a lot of money but also put people in danger. “Physicians allege that reimbursement rates are so low and delayed by the firm that patient health is jeopardized,” according to the AAJ.
Patients must find a means to cover the expenses themselves because the corporation routinely undervalues reimbursement rates for medical care.
UnitedHealth says that its system is fair since a separate business calculates payment rates, Ingenix, rather than in-house. Most individuals are unaware, however, that UnitedHealth controls Ingenix and thus has complete influence over the calculating efforts.
The company’s success is largely due to a relationship with AARP to attract elderly policyholders, according to outgoing CEO David Wichmann, who made $18,900,000 in 2019.
The insurance then charges excessive premiums to its older customers for no apparent reason other than to be able to.
9. Allstate
To be fair, Allstate is at the top of the list primarily due to its unwillingness to honor homeowners’ insurance claims.
Individual life insurance had an NAIC ratio of.70, while group life insurance had a ratio of 0.0. Both of these factors suggest that Allstate isn’t as horrible for life insurance as it appears for homeowners and auto insurance.
However, if you’re considering combining policies, you should know how Allstate handles other types of insurance.
The Better Business Bureau provides 237 primarily one-star reviews for Allstate, most of which are about auto and house insurance. However, if you’re interested in bundling policies, this is useful information.
Related Post: Allstate Insurance Reviews: Is it worth your money
10. Anthem
Anthem, formerly known as Wellpoint, is an insurance company offering Blue Cross and Blue Shield plans to many customers.
On the other hand, Anthem frequently fails to provide that coverage, despite multiple government reprimands and fines in recent years for canceling coverage or denying payment on covered claims. Meanwhile, Gail K. Boudreaux, the company’s CEO, earned $15,400,000 in 2019.
This organization has a long history of canceling plans for chronically ill or pregnant policyholders and treating customers unfairly in other ways.
Medical practitioners have been asked to divulge personal information regarding policyholders’ previous diseases for the corporation to cancel their coverage.
Anthem appears to be more concerned with the profit line than with the well-being of policyholders, who frequently require medical treatment for major illnesses or injuries.
Read more on Aetna vs Anthem: What Is The Difference?
11. Farmers
Farmers Insurance makes millions of dollars in profits year after year, despite customers consistently rating the company as poor in customer satisfaction.
Despite the insurance company’s sustained financial success, Consumer Reports and JD Powers & Associates rank it among the country’s worst auto and home insurance firms.
The corporation employs various strategies to reduce claimant payments, including incentivizing staff who fulfill their low payment targets. Internal documents leaked to the public revealed that adjusters are trained to prioritize profits over policyholder interests and rights. Adjusters can earn pay raises, bonuses, and other advantages if they successfully reduce payments by convincing claimants to accept lowball proposals.
Farmers’ primary focus is on their pockets, as evidenced by this tactic.
12. Liberty Mutual
While Liberty Mutual may not be as good at denying and delaying claims as State Farm and Allstate, it is said to have engaged the same consulting firm as the other two to cut expenses. This cost-cutting drive resulted in delays in claim processing, incorrect claim denials, and other techniques.
According to sources, Liberty Mutual began abandoning and refusing to renew policies for consumers in high-risk locations, such as those prone to hurricanes or floods. As a result, policyholders were left without the protection they required in the case of a tragedy beyond their control.
While these techniques likely affect policyholders and claimants, they helped the company’s bottom line. CEO David Long earned $19,400,000 in 2018, a 14 percent raise over the previous year, indicating that the insurance is not suffering financial difficulties.
READ ALSO: 10 Worst Life Insurance Companies
13. USAA
The United Services Automobile Association (USAA) is another insurance firm on our list of top worst insurance companies that is notoriously difficult to deal with, albeit not on the AAJ’s list.
While USAA proudly promotes itself as the greatest solution for military men and their families, it is still primarily concerned with its revenues, which surpassed $4 billion in 2021.
Delaying claim processing is one method that USAA is said to do frequently. You might question why an insurance company wouldn’t want to handle claims as quickly as possible, but this strategy frequently puts claimants under financial strain.
When bills are piling up, and it’s unclear whether USAA would pay a claim at all, folks are much more likely to take any offer that comes their way to ensure they get a check.
Unfortunately, that check is frequently insufficient, leaving them without the required finances.
USAA claims to care about its military-member policyholders, but these facts and charges show its primary concern is its growing profits.
Related Post: USAA Auto Insurance Reviews 2022
14. Global Life
This freshly rebranded insurer, formerly known as Torchmark, concentrates primarily on insurance in Alabama, Texas, and other southern states. Despite having been in operation for over a century in various forms, the corporation is said to engage in some very unethical acts.
The insurer has been chastised for charging minority customers greater premiums than their Caucasian counterparts, particularly for funeral insurance.
The corporation has also been accused of scamming senior folks and employing several subsidiary companies to tout case-specific insurance, such as cancer insurance, that is greeted with the same lack of customer service as the parent company.
Conclusion
The insurance sector in the United States generates over a trillion dollars in revenue annually. These corporations aren’t hesitant to pay claims because they’re in financial trouble.
When you acquire a life insurance policy, you want to know that your heirs will be taken care of without having to deal with the insurance company’s red tape.
People who thought they were getting something, only to find out they weren’t, is a recurrent topic in customer complaints. Examine your coverage thoroughly and ask as many questions as you need. If you aren’t getting good service before the sale, you aren’t likely to get it once the policy is implemented.
References
- derricklawfirm.com – The 10 Worst Insurance Companies in America
- life-insurance-law.com– The Worst Insurance Companies in America
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