Life Insurance Lawyer Alaska
Whether you reside in: Wasilla; Ketchikan; Sitka; Juneau; Fairbanks; or Anchorage, our life insurance attorneys who live and work here in Alaska are here to help resolve your delayed or denied life insurance claim.
Can mental health be the basis for a life insurance claim denial?
Insurance companies try to rely on this excuse all the time
Life insurance companies are in business for one reason and one reason only – to make money. To do this, they have to collect the greatest amount of premiums possible and deny payment on the maximum number of claims possible. It may not seem fair, but it is the simple math of how the industry works.
Sometimes, however, life insurance companies push the envelope too far. Such was the case recently when an insurer tried to rescind an insured’s policy right around the time of the insured’s death, based solely on the insured’s mental health conditions. Fortunately, the Federal Court system didn’t let the insurance company get away with that.
As lawyers specializing in the wrongful denial of life insurance claims, we try to stay abreast of all the legal developments that happen in our area of the law. Not only do we use those cases to help us form winning strategies for our clients, we also report on those cases here. The hope is that if you or a loved one has experienced a similar claim denial, you’ll feel emboldened to call us and to let us help you contest that claim denial.
With that, let’s turn to the facts of our case.
Doing the best they could
This case involves a married couple – Christina and Derek. Both individuals were in their mid-thirties and gainfully employed. Christina’s employer, a popular radio station, offered a generous benefits package that included a group life insurance policy for employees and their spouses.
When the life insurance plan was offered to them, Christina and Derek decided to take advantage of the offer. They applied for policies covering each of their lives, and naming each other as beneficiaries under the respective policies. Upon receiving the applications, the insurance company issued what they called “provisional policies.” These were policies that were intended to stay in place while the insurance company performed a thorough investigation into the couple’s medical background.
The provisional policies were issued on September 14, 2015. Christina paid all premiums due under the provisional policies through the month of December. On December 17, 2015, however, Christina was killed in a tragic car accident. As it turns out, that same day, the life insurance company was drafting a letter to Christina and Derek cancelling the provisional policies. The letter explained that the insurer was doing this on the grounds that the medical background investigation revealed both Christina and Derek suffered from moderate depression and borderline personality disorder.
It was true that Christina and Derek had both received these diagnoses. Nonetheless, they had both been on medication for years, were both receiving regular psychotherapy, and were generally living very healthy lives at the time of Christina’s death. In fact, therapists would later testify that they had never seen a couple work so hard to try to achieve true mental health.
Importantly, the December 17 letter from the insurance company to Christina and Derek was not mailed on that date. In fact, before the letter was ever placed in the mail, the insurer received Derek’s notice of claim with respect to Christina’s death. At the time, Derek had no reason to believe his claim would be denied.
The harsh denial letter
Almost contemporaneously, Derek received two letters: (1) a letter alerting him that the insurance company was denying his claim for death benefits under Christina’s policy; (2) a letter informing him that the provisional policies were being rescinded due to the couple’s history of mental illness.
While Derek was understandably overcome with grief, he also couldn’t believe the contents of the two letters. If he and his wife hadn’t worked so hard to overcome their mental health challenges, perhaps the letters might have made sense. But they were the couple who was doing the hard work, they were making life work for them, they were overcoming every challenge. He simply didn’t understand.
Fortunately, Derek did a very wise thing in that moment. He sought the advice of an attorney who specializes in the wrongful denial of life insurance claims. The attorney reviewed all of the files and instantly recognized that the insurance company’s actions smacked of discrimination under the Americans with Disabilities Act (“ADA”). With Derek’s approval, he filed a lawsuit against the insurer for discrimination under the ADA, as well as breach of contract under the provisional policy.
After a long, hard-fought battle, Derek finally prevailed against the insurance company. Specifically, the court found that the insurer’s investigation of Derek & Christina’s medical background had ignored the positive prognoses given by their therapists. To the contrary, the insurance had simply seen the diagnoses of depression and borderline personality disorder and made a rush to judgment. Based on these facts, the court found the insurer: (1) should not have rescinded the provisional policy; and (2) should have paid Derek the full death benefit his wife had intended for him. The court also found the insurance company had illegally discriminated against Derek and Christina under the ADA.
As attorneys who practice exclusively in the area of life insurance claim denials, we’re not shocked by the facts of this case, nor of its outcome. We are fully aware that insurance companies make the most money when they deny the most claims. We’re also aware that those companies will push the bounds of appropriateness in an effort to exploit grieving beneficiaries like Derek.
Our sole and exclusive focus is to help wronged beneficiaries recover the death benefits their loved ones intended for them. If you have received a claim denial based on facts similar to this case – or for any reason at all – please call us. We battle life insurance companies all the time. We know their tricks and games and we successfully confront them in court on a regular basis.
Your initial consultation is free and you typically won’t need to pay us a dime until you recover something in your case. Call us today. We’re here to help.
- Number one is a misrepresentation on the application. This typically involves failing to disclose a medical condition. However, we can get over this hurdle the majority of the time.
- A lapse of a life insurance policy is probably second most common. What happens is that the insured gets sick and misses a payment or two. These are tough, but often we can get these claims paid.
- Probably third is the type of death exclusion. This could be a suicide or it could be a self-inflicted injury. Murder is another exclusion. Health again can fall under this exclusion. We often win suicide exclusions as we cite case law that the death was actually accidental.
- A very common exclusion is the alcohol exclusion. The insured may have been killed in a car crash, but the autopsy revealed alcohol in the person’s system. We have many legal briefs to combat this exclusion.
- Heroin and opiates or illegal drug exclusion is one of the biggest now. With the opioid crisis, there are tens of thousands of deaths.
- Prescription drug overdose exclusion may involve an overdose of medicine or taken medicines that are contraindicated.
- An ex-spouse being cut off from life insurance benefits is a big one. We actually have a half dozen ways to get over this hurdle.
- Having a spouse not listed as a beneficiary is another reason for denial
- Having a child not listed as a beneficiary is one too.
- Having only a primary beneficiary who is deceased is another.
- On an AD&D (accidental death and dismemberment) life insurance policy, a fall not being considered an accident is extremely common.
- The insured’s age not being correct on the initial application is a reason for denial.
- Having the wrong social security number listed is common.
- An autoerotic asphyxiation exclusion is an easy one for us to beat.
- An omission on the application is a big reason for denying a life insurance claim, but we have legal briefs to this effect.
- Not providing the required documents to the insurance company after death is a reason.
- Information which is argued to not be correct is one.
- When there is a dispute between two or more beneficiaries, an interpleader may occur, and we always get these resolved quickly.
- A beneficiary not named is a reason for not paying it out.
- A life insurance policy may be transferred from one company to another by the employer which causes major problems.