NU Online News Service, July 17, 11:15 a.m. – Horace Mann Educators Corp., Springfield, Ill., says it has agreed to settle a class-action suit brought by customers who claim they misunderstood an income offset provision in its long-term disability insurance policies.
Lawyers filed the suit in May 2000 in a Marshall, Texas, state court. The original plaintiffs were eight teachers who said they learned too late that a Horace Mann LTD policy provision permitted the company to deduct early retirement income from its LTD benefits obligations.
Because of the retirement income offset provision, the value of the policies to the teachers was far less than the teachers had believed, the suit alleges.
The teachers also accused Horace Mann of hurting policyholders in the 1980s and 1990s, by encouraging them to replace LTD policies without the income offset provision with policies that included the provision.