the fine print | sean p. murphy

Insurer reverses decision, restores elderly woman’s coverage

Madeleine Maldonado in her home.
Suzanne Kreiter/Globe Staff
Madeleine Maldonado in her home.

Insurance giant AIG has agreed to restore long-term care coverage for Madeleine Maldonado, the 87-year-old Concord woman whose policy was canceled by the company when she wrote the wrong amount on the check for her premium.

Maldonado’s plight was featured in a front-page column in The Boston Globe on Tuesday, sparking widespread outrage from readers.

“I’m absolutely thrilled, and my mother is, too,” said Carey Peabody, Maldonado’s daughter.


Peabody said a top AIG executive called her Thursday to apologize for the cancellation and to say the policy — worth almost $600,000 in potential benefits — would be restored.

Get Talking Points in your inbox:
An afternoon recap of the day’s most important business news, delivered weekdays.
Thank you for signing up! Sign up for more newsletters here

Maldonado has been diagnosed with dementia and is being looked after at home by family and a cadre of professional care providers who are being paid by her family. The insurance will now kick in to defray some of the cost.

The AIG executive also told Peabody the company will waive thousands of dollars in premiums that would otherwise be due to get the policy up to date.

“I was very calm on the phone with AIG, but as soon as I hung up, I screamed and danced around the room,” said Peabody, who spent more than a year battling AIG for reinstatement, even enlisting state Attorney General Maura Healey as an ally.

A spokesman for AIG said Friday night said that the insurance giant would restore the policy.


“Our priority is to honor our commitments to customers like the Maldonado family, and we work hard to ensure that every claim is handled fairly,” AIG said. “Once the issue was raised to the attention of senior management, we reviewed the case and made the decision to reinstate the policy.”

In 2011, Maldonado wrote the exact amount due for her annual premium in numerals in the box on the top line of the check ($3,399.91), but the wrong amount in words on the lower line of the check.

Banking rules hold that when the two numbers are contradictory, the words prevail.

As a result, Maldonado underpaid her premium by $98.92.

Three months later, AIG terminated her policy for nonpayment after sending Maldonado two notices without hearing back from her or her family.


Maldonado and her daughter were shocked to learn AIG had canceled the policy after they contacted the company years later when Maldonado’s deteriorating health prompted them to file a claim. Peabody said her mother either missed or misunderstood the two notices.

‘I was very calm on the phone with AIG, but as soon as I hung up, I screamed and danced around the room.’

In a steady stream of calls and e-mails, Peabody appealed to AIG to accept a late payment and reinstate the policy. But instead of focusing on Maldonado’s obvious intent, AIG pointed to her failure to respond to an invoice for the past-due $98.92 or to a later notice of termination.

“I appreciate AIG reopening the case for review and changing its determination to give us the insurance,” Peabody said. “But frankly, we never should have been in this position. I spent more than a year pleading my case, and brought in the attorney general, but only after my mother’s picture and story appeared on the front page of the newspaper did AIG really respond.”

Peabody said her mother felt great relief when told the insurance policy was back in effect.

“She really didn’t understand how much of a big deal it was until it was in the paper,” Peabody said. “Then she was pretty disheartened, thinking she had really dropped the ball. But now there’s a happy ending to this story.”

Sean P. Murphy can be reached at Follow him on Twitter @spmurphyboston.

Sean P. Murphy can be reached at Follow him on Twitter @spmurphyboston.