Chicago family's life insurance payout stalled for months after cyberattack

A Roseland family was left waiting for months for a life insurance payout after their father's death, after a cyberattack disrupted services at TruStage earlier this year.

When Stephanie McWoods lost her 64-year-old father in July, she said she expected to grieve, but not to have to fight.

"I imagined this experience being a lot smoother," she said.

McWoods anticipated the life insurance policy her father left behind would help her family through a difficult time and help pay to put him to rest. But when she called TruStage to start a claim on July 25, she only got an automated response.

"It basically informed you that they were going through a cyberattack, and that they don't have access to any records, and there's no one that you can talk to," she said.

She said she repeatedly submitted information and called for updates, but still couldn't get any answers about when her claim would be paid.

To make things worse, she said TruStage kept withdrawing premium payments after her dad died.

"This does not feel right. It doesn't seem legal," she said.

McWoods said she didn't get a claim number from TruStage until Oct. 1, and more than 80 days after first reaching out, she still hasn't gotten the funds from her dad's policy.

"It's possible these extenuating circumstances are allowed by the state regulator," said Mark Friedlander, spokesman for the Insurance Information Institute.

Friedlander said a cyberattack is not a typical reason for a life insurance death benefit to go unpaid.

He said, normally under Illinois regulations, an insurer has 15 business days to acknowledge the claim. In straightforward cases, insurers must pay claims within 30 to 60 days of receiving all necessary documents.

"It seems to be a broader problem, certainly," he said.

Friedlander said that's why the Illinois Department of Insurance needs to step in to investigate.

TruStage acknowledged that claims processing has been impacted by the cyberattack, and apologized for the frustration it has caused.

"A recent cyberattack significantly disrupted our digital systems, impacting our normal ability to process claims and communicate with customers," a TruStage spokesperson said. "In some cases, this incident has caused delays and gaps in the updates that customers expect, and we understand the frustration it has caused. We continue to expand servicing and claims capabilities as our recovery progresses, including expanding our customer service support team and creating new processes to help meet customer needs as fast as possible."

But within less than 48 hours of the CBS News Chicago Investigators reaching out, McWoods said she finally got the call she's been waiting for from TruStage, telling her a check would be mailed in the next two business days.

While she doesn't have it yet, she hopes her experience will help others "to hopefully get answers and to get their payout."

The Illinois Department of Insurance did not immediately respond to requests for comment, but TruStage said they have been in touch with state regulators.

The company also said it will reimburse McWoods for any premium payments that were withdrawn after her father's death.