Sears Life Insurance: Updated 2021
last updated on March 7, 2022Most likely you’re here today because you are interested in learning more about the status of your Sears life insurance coverage.
Below, you’ll get a detailed analysis of recent news about the Sears life insurance program.
Let’s begin!
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What happened to Sears retirees and their life insurance benefits?
On March 15, 2019, Sears Life Insurance abruptly terminated the life insurance coverage of around 29,000 retired Sears Holdings Corporation workers.
Some retirees received a letter notifying them of the change only after Sears had already stopped paying the policies.
This happened a couple of months after Sears sold most of its remaining assets to Transform Holdco LLC, an entity controlled by Sears’ former CEO Edward Lampert.
The company claimed that they could no longer justify paying high premiums for life insurance policies.
The Sears retirees had coverage with death benefits worth at least $5,000 and up to $14,500 that cost Sears $1.3 million in total in monthly premiums.
After filing for bankruptcy in October 2018, Sears proposed a new plan that would significantly reduce the amount of money that the retired workers would receive.
Instead of getting thousands of dollars in benefits, former Sears employees would now receive only between $115 and $135 from the bankrupt retailer.
They were given the option of converting their life insurance to whole life insurance, but they would have to pay for it on their own.
In June 2019, the federal judge overseeing the bankruptcy approved the formation of a committee to represent the interests of the retired Sears workers and they filed a lawsuit against the company.
They found out that a lawsuit from 2001 required Sears to pay its employees their life insurance policies.
As part of this lawsuit, the company didn’t have the right to stop making life insurance payments unless it was totally liquidated.
What can the retirees expect from the recent settlement?
In October 2019, Sears reached a $3 million settlement over life insurance benefits. The deal is still awaiting official court approval but the attorneys representing retirees are confident that the deal will be approved.
Sears agreed to set up a compensation fund for the beneficiaries of retired workers who died after March 15, 2019, the day on which the company canceled life insurance benefits.
However, families of the deceased former employees who had Sears’ life insurance policy and passed away before March 15, may still be eligible for some life insurance payments.
Current retirees will be able to file a claim for the amount of their benefits up to a limit of $10,500.
As for the retirees’ pensions, they were covered by the Pension Benefit Guaranty Corporation and the federal pension agency took over Sears’ plans.
How will this settlement affect the retirees’ life insurance coverage in retirement?
Many Sears retirees are not able to obtain new life insurance policies anymore simply because they are too old.
The average age of affected Sears retirees is 80. Due to their age and pre-existing conditions, some of the retirees are not eligible to replace their Sears life insurance with another one.
However, this is not necessarily the case, as there are quality life insurance options for older people. Keep reading to find out more.
How can the retirees add more life insurance coverage?
The eligible retirees can consider purchasing whole life insurance that has a lower premium compared to a term life policy and will last until the time of their death.
In addition, the cash value of the policy will accumulate over the years. The death benefits are tax-deferred, and the retiree’s family will receive a lump sum from the insurance provider at the time of his or her death.
When only covering funeral costs is needed, burial insurance may also be a good option for some retirees as it is inexpensive and requires no medical examinations.
We can help you get more life insurance coverage
We here at Buy Life Insurance For Burial may be able to help you with quality life insurance coverage.
As long as you’re 90 years old or younger, chances are that there is a life insurance policy option that can give you peace of mind at a reasonable price.
We help people nationally get burial insurance quotes on:
- Yourself or your spouse,
- Your parents,
- Elderly people 86 and older,
- Your siblings and adult children, and
- People in bad health using no questions asked life insurance,
To get our help, do the following:
- Fill out the form at the top of your phone, or on the right side of your computer monitor, to learn more about what programs you may qualify for, or,
- Call 888-626-0439 now and speak to one of our friendly representatives on what options you may qualify for.