As attorneys who specialize in the wrongful denial of life insurance claims, we regularly see life insurance companies try to trick policy beneficiaries out of valid claims for death benefits. One of the ways that they do this is by invoking a policy exclusion to justify the denial.
While exclusions may vary from insurer to insurer and policy to policy, there are some standard exclusions that life insurance companies turn to all the time. They do this, of course, because they believe they can manipulate the facts and circumstances of a policyholder’s death to come within these exclusions. They also know that many beneficiaries will simply be too depressed to fight a claim denial.
One exclusion life insurance companies rely on all the time is the illegal drug exclusion. There are various iterations of this exclusion but basically it relieves the life insurer from having to pay a death benefit if the policyholder died with illegal drugs in his system. Keep in mind, the policyholder doesn’t have to die as a result of the illegal drug. The very presence of the drug in his system is enough to nullify the policy.
It seems like a relatively straightforward policy exclusion, right? Either you have illegal drugs in your system at death or you do not. In reality, things are not always that clear. The following case illustrates this point concisely. It also illustrates how life insurance companies are willing to manipulate facts in order to avoid paying out valid claims.
A prescribed drug that is sometimes illegal
The case involved a woman named Anna. Anna was a successful real estate agent. Though her clients knew her as a top-notch professional, Anna was privately amazed at the life she had built for herself. Her road to success was not an easy one.
As a child, Anna had been diagnosed with Attention Deficit Hyperactivity Disorder (ADHD). This condition caused a whole host of problems in her life. As a child, she was constantly at trouble in school, mostly because she simply couldn’t focus on any one thing for very long.
To add insult to injury, Anna’s parents belonged to a religious group that did not believe in medical intervention. Consequently, Anna went through her whole young life without any medicine or medical attention to her ADHD. When she turned 21, however, she was finally able to move out of her parents’ home. It was at that time that she finally went to see a medical doctor.
The doctor listened to Anna’s symptoms and immediately prescribed a drug called Adderall. In adults, the drug is used to treat ADHD and narcolepsy. For people without those conditions, however, Adderall is frequently used as a recreational drug. It is particularly popular as a stimulant that purportedly allows users, often young professionals, to work long hours without tiring.
For people who truly need the drug, it is described as a life saver. For those who don’t, Adderall use can quickly turn into a dangerous addiction. Consequently, Adderall use without a prescription is illegal in the United States.
Of course, Anna thrived once she started using Adderall. For the first time in her life, she was able to focus, learn, and be truly productive. Within a few years of taking Adderall, she had completely turned her life around.
Sadly, Anna died in a car accident at a very young age. She had a life insurance policy in place with a death benefit worth $200,000. Anna had named her sister Margaret as the sole beneficiary under the policy.
A claim denial based on “meth” use
Shortly after her sister’s death, Margaret filed a claim for life insurance benefits. A denial letter came in the mail just a few weeks later. According to the letter, Anna’s autopsy report had revealed the presence of “amphetamines,” which the insurer presumed was methamphetamine – an illegal drug commonly known as “meth.” Since Anna’s policy contained an illegal drug exclusion, the insurance company explained, it was relieved from paying out on the policy.
Margaret knew her sister never would have taken meth. Her life meant too much to her. A quick internet search revealed that Adderall is a mixture of four different “amphetamine” salts that, although similar molecularly to meth, have very different effects on the body. Surely, the insurance company had access to this research as well. The denial reasoning seemed fake to Margaret.
The day after receiving the denial letter, Margaret contacted an attorney who specialized in the wrongful denial of life insurance claims. Sure enough, the attorney had seen life insurance companies try to deny claims on this exact basis in the past. It never worked. There simply was no science to back up the life insurer’s faulty presumption. This was just another case of a life insurance company manufacturing a phony justification for a claim denial in hopes that the beneficiary would just walk away from the benefit.
The attorney quickly filed an appeal with the insurance company’s internal review board on Margaret’s behalf. Within his legal brief, the attorney reminded the insurer of the punitive damages it might be forced to pay should he have to file a lawsuit. In truth, the insurance company didn’t need to be reminded. It knew exactly what it was doing when it denied Margaret’s claim.
Ultimately, the review board overturned the claim denial and paid Margaret the full benefit her sister had intended for her. While it was a good result, it was still a terrible ordeal for a grieving sister to have to face at such a difficult time.If you or a loved one have had a life insurance claim denied recently and the reason for that denial just doesn’t seem right to you, please contact our firm immediately. We contest the wrongful denial of life insurance claims for a living. We know the tricks life insurers play and we don’t let them get away with it. Call us today. We’re here to help you get the benefit your loved one intended for you.