In a changing political and legal environment, it is important for businesses to keep their policies in line with changes in order to avoid getting themselves in to hot water. Such is the case with today’s insurance providers offering life insurance policies to same-sex couples. While some providers still follow archaic methodology and policies for determining the outcomes of claims filed, the more diligent providers will make sure to to avoid denials for reasons that are touchy from a legal, political, or even ethical standpoint. Obviously insurance providers may tend to overlook these factors when it comes to making a determination on a claim, as a denial for any reasons will help keep money in their pockets. However, acting in this manner may seem to save money upfront, but could end up costing far more in lost business and lawsuits. Such was the case when a life insurance beneficiary sought to collect on his domestic partner’s life insurance policy with Cigna.
The insured individual went through the process of applying for recognition of his partner as a qualified domestic partner and was approved with a $50,000.00 life insurance coverage being at stake. This policy was established with Prudential. However, when the insured sought to add six figures in supplemental life insurance coverage through Cigna, the same-sex partner was not listed as a beneficiary. Upon the insured’s death, Cigna refused to pay out as the partner did not qualify as a legal spouse under state law. Instead, they paid the proceeds to the insured’s mother instead.
It is understandable that the denied domestic partner would be upset. However, being upset with a life insurance provider on its own will get you nowhere in terms of collecting when you believe you’ve be wrongfully denied. As far as options go, a denied beneficiary can either attempt to appeal the decision with the insurance provider themselves which is a recipe for disaster or get an experience life insurance law firm. In the case at hand, the denied beneficiary decided to file a claim against the insurance provider.
Without diving any further in to the legal process or the outcome of this case, we thought it would be a great example to clients on how they can go about handling a claim denial. Whether your denied claim involves a big conflict with state law like the one at hand, or simply a denial due to more common reasons, the fact remains that you do not have to take the fight laying down. As you can see from the described case, the denied beneficiary decided that no was not a good enough answer and pursued the case further. The amount of money at question was sufficient enough to justify, but he also clearly had other factors at stake regarding equal protection. By taking a stand, his actions could help shape the legal precedent around similar future situation. It is important to understand everything that is at stake when your back is against the wall. Do not be afraid to consult with an experienced legal team as you seek to fight against a wrongfully denied life insurance claim.