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A demolition firm owner who faces a $172,299 default court judgment in connection with use of long-term care benefits says he does not understand the insurer's position and believes that he had no choice but to get out of his home and go to work, even though he has severe problems with walking and is facing chronic pain.
John Egan called ThinkAdvisor to respond to a report indicating that Transamerica had received a ruling in favor of the judgment from a judge in the U.S. District Court for the Northern District of California.
Egan said he had done his best to stay in touch with Transamerica and the court but had not been able to find a lawyer who could help him with the case and had not heard about the judgment.
"I don't understand long-term care at all," Egan said.
But "the money they were giving me wasn't paying the bills," he said. "I need to work."
Transmerica declined to comment on pending litigation.
What it means: Consumers may have much different interpretations of insurance policies than insurance companies or advisors do.
The backdrop: Egan owns a demolition firm in Millbrae, California.
In 2020, a relative helped him buy a life insurance policy with a $500,000 face amount and a $500,000 long-term care rider.
LTC insurance policies and life insurance riders typically pay benefits who need constant supervision because of dementia or are unable to perform at least two activities of daily life, such as walking, eating or going to the bathroom.
Egan filed a claim for the long-term care benefits in 2023, after he broke his ankles severely in an automobile accident and he discovered that one of his insurance policies included LTC benefits.
Transamerica objected after an investigator it hired found that Egan had gotten out of his home, shopped in stores like Costco and unhitched a large trailer from his truck. The court ruled in favor of Transamerica's motion for a default judgment, finding that Egan had not responded to the suit.
Egan said he had to work, in spite of his pain, because he had no employees available to do the job.
Egan saw Transamerica's investigator and had reported the investigator to the police because he believed the investigator was using illegal methods, Egan said.
Egan responded both to Transamerica's communications and to the lawsuit, but he filed the response with the court two days late, according to Egan.
Egan's thoughts: Egan said he did not know what either disability insurance or long-term care insurance were when he bought the life insurance policy and had LTC benefits only because his relative had purchased a policy designed that way.
He said he likely would not have bought either disability insurance or LTC coverage if he had known what those were in 2020.
"I never planned to be disabled," he said.
But he said he does have severe trouble with walking and needs a motorized scooter to get around.
"I'm not the same person I was, and I don't think I ever will be," he said.
He expressed surprise that Transamerica had received a default judgment without first making an effort to call him to get the money back. But he questioned how well Transamerica will be able to collect on the judgment.
"The amount of money that I owe [Transamerica] is not close to what I owe other people," he said.
Allison Bell can be reached at allison.bell@arc-network.com.
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