the outside of a sears store that is closing

Sears Reaches $3 Million Life Insurance Benefits Settlement

Just a decade ago, Sears was a retail giant that led sales for consumer products in several markets.

It was the store people shopped for their hardware, clothing and almost any other need. So, it came as a shock when Sears filed for bankruptcy just last year.

After declining sales and a jeopardized market position, Sears simply couldn’t cut it. They couldn’t find a way to compete against Amazon’s new era of online retails.

Why would their customers journey out to an actual store when they could have everything they need sent to their doorstep with just a few clicks?

It was indicative of the way the industry as a whole is headed.

The more that online retailers earn new market space, the older retailers lose business and face bankruptcy. Sears may not be the last mega-store to go out of the business.

But, it is the first to hold up its end of the bargain and give its employees their life insurance cuts (after some battling in court).

To learn more about the trial that ensured Sears retirees got their life insurance, keep reading below.

Sears Filed for Bankruptcy Last Year

It’s no secret that the retail industry has been struggling to survive for a while.

Online retailers like eBay, Amazon, and Etsy have reached a point of efficiency which traditional ones could only dream of. They know how to make sure their employees work hard, and they reap in billions of profits for it.

Sears was just one of the first to feel the brutal effects that the internet has had on the retail industry. It filed for bankruptcy when it had $6.9 billion in assets and over 700 stores across the United States. There was money in the bank for the company to use to keep going forward.

Yet, its leaders realized that there was no way for them to survive what was coming.

The brand had lost its allure, and they were already paying employees the minimum wage. The wounds Sears was losing revenue from were simply impossible to heal.

So, the company’s leaders filed bankruptcy, hoping to recoup losses. Yet, they tried to recoup losses by holding back what was rightfully Sears’ retirees. They canceled the life insurance plans of several former employees in an attempt to cut back on losses.

An Earlier Deal Prevented Them From Cutting Policies

Yet, former employees fought back.

They recognized that there was an injustice done to them when they could no longer collect on their life insurance policies. They filed a lawsuit against the company, and a team of lawyers got to work holding Sears’ leaders accountable.

They found that a prior lawsuit obligated Sears to pay their employees their life insurance policies.

They found that Sears gave up its right to stop making life insurance payments as part of a 2001 lawsuit about the same thing. It could only stop making payments if the company totally liquidated.

And since Sears’ leaders were working on recouping lawsuits — the company wasn’t totally liquidated. Because of some clever legal research and arguing, the company was required to set up an account for life insurance beneficiaries.

There is $3 million in it for qualified applicants.

The New Fund Isn’t Official… Yet

Although the deal was made, it has yet to be approved by a judge.

Sears’ leaders are working on setting up the account, and representatives for retirees are confident that they will approve the deal. And once it’s approved, it’ll be time to collect.

Yet, since the company remains in dire straits, and is still bankrupt, there are stipulations.

Not everyone will get a piece of the fund, and those that do may not get as much as they want. Keep reading below to learn more about the fund, and what you can expect out of it.

It is For Beneficiaries of People Who Died After March 15

The stipulation on the life insurance fund is that it is only for people who were qualified to receive it after March 15.

If your loved one passed away before then, you may not be eligible to collect from the Sears life insurance fund. This date was selected since it was when Sears canceled its life insurance program.

Yet, just because you fall short of the March 15 date doesn’t mean you won’t get life insurance payments. This date only applies to people eligible to receive from the life insurance fund. If a loved one was on Sears’ life insurance policy and passed away before March 15, you may still collect from it.

If you’re having difficulty collecting life insurance as a beneficiary, be sure to reach out to a lawyer. They’ll make sure you get what you deserve!

Current Applicants Could Get Cents on the Dollar

Just because there was a fund set up to ensure people receive their life insurance payments doesn’t mean nothing’s changed.

In fact, since Sears is now a bankrupt company, beneficiaries could end up with less. Sears had hundreds of employees, and now there is only $3 million to go around between them.

Yet, getting something is still better than nothing. Once this fund runs out, there may be nothing left to get. Sears’ future is too uncertain to say anything for sure.

Even if you won’t get as much as you expected, still apply for the fund if you believe you’re eligible. Your loved one wanted to leave something behind for you and you deserve it.

We Know What Matters

Picking a life insurance company for your family means picking someone you can trust.

Several people believed that they could trust Sears before the company went bankrupt. Now, they must fight for what is rightfully theirs.

We stand right beside them, too.

As an insurance company, we understand what actions like Sears’ hurt the industry. It harms the invaluable trust insurance companies have with their clients, and we believe beneficiaries should get what they deserve from Sears.

And if you want an insurance company that guarantees beneficiaries will receive what they’re owed, contact us.

We work tirelessly to provide top-of-the-line insurance coverage for everyone and work with clients to ensure they’re satisfied with our policies.