As attorneys who specialize in the wrongful denial of life insurance claims, we often think we’ve seen just about every excuse for a life insurer to deny a claim. Just when we start to feel that way, however, a new client calls us with yet another unbelievable situation.
Being as involved in the life insurance industry as we are, we know that life insurance companies are highly motivated to deny claims. After all, these insurers are for-profit companies. That means that if they systematically: (a) collect premiums from policyholders; and (b) refuse to pay out death claims against the policies they issue, they will make the maximum amount of profits. Consequently, shareholders will be happy, executives will receive big bonuses, and business can continue as usual.
What that also means, sadly, is that families who intended to have financial security following the death of a loved one may be thrown into dire circumstances. That is tragic in every case but it is particularly sad when the claim denial is based on completely ludicrous reasoning. This article presents one such case.
A standard policy for a person with a family business
The case involved a gentleman named Matt and his wife Toni. Matt and Toni were entrepreneurs. Though they had tried and failed at many business concepts, the one that finally penciled out for them was dog breeding. Specifically, the couple bred champion-level “white rhino” pit bulls. It is very difficult to breed healthy versions of this type of dog but if you can, puppies can be sold for tens of thousands of dollars. Based on the careful and humane conditions Matt and Toni created, they successfully bred white rhino puppies for years.
Matt was the lynchpin behind the business. As such, the couple decided they should take out a life insurance policy in Matt’s name. That way, if anything were to happen to him, Toni could have a comfortable life without the pressure of running the business by herself.
The couple first set out to obtain a policy after they had successfully bred white rhinos for over 10 years. As part of the application process, Matt had to fill out a lengthy questionnaire. One of the questions read as follows: “Does the applicant regularly engage in any inherently dangerous activities? (Inherently dangerous activities include, but are not limited to, SCUBA diving, sky diving, and motorcycle racing.)”
In response to that question, Matt answered “No.” The questionnaire did not ask any questions specific to the couple’s business, aside from inquiries about annual income and the number of hours worked per week. After reviewing Matt’s responses, a life insurance company issued Matt a policy worth $2 million.
Sadly, Matt died of a massive heart attack just 10 months after the policy issued. Toni, who was grateful to have the policy to rely on, submitted a claim to the life insurer.
Claim delay due to “inherently dangerous” dogs
Because the policy was so new when Matt died, the life insurance company quickly responded to Toni’s claim by issuing a letter containing following statement:
“Your husband’s policy was less that two years old at the time of his death and is therefore within the ‘period of contestability.’ Consequently, we have a right to investigate Matt’s life so we can make sure he was truthful in his life insurance application. This investigation will take between three to six months, after which we will issue a decision regarding your claim. In the meantime, please provide the following information.” The letter went on to ask about things like social media accounts and memberships in any organizations. Toni complied with the requests.
Just two months later, Toni received a claim denial letter in the mail. In it, the life insurance company justified its denial by saying the following: “In your husband’s insurance application, he denied his involvement in any ‘inherently dangerous activities.’ Nonetheless, a post-mortem investigation into Matt’s life (via social media and other sources) reveals that he was a breeder of highly dangerous dogs. Had we known this, we never would have issued him a life insurance policy. Consequently, we must deny your claim at this time.”
Upon reading the letter, Toni immediately contacted an attorney specializing in the wrongful denial of life insurance claims. The attorney stated that he had heard hundreds of bogus reasons for denying a claim, but that this one was new to him. He agreed to take Toni’s case.
Within days, the attorney had done extensive research regarding the relatively small rate of deaths due to pit bull bites. He contrasted this with statistics regarding those “inherently dangerous activities” listed in the insurance application and found those activities to be exponentially more dangerous than the simple ownership of a pit bull. The attorney also obtained sworn witness statements from colleagues and customers of Matt’s, all of whom attested to the fact that he purposeful bred and trained his dogs to be gentle. The attorney submitted all of this information to the insurer’s internal appeals board and requested a hearing on the matter.
Following the hearing, the insurance company reversed its claim denial decision. It simply had no evidence proving that pit bull ownership (or breeding) was the sort of “inherently dangerous activity” an insurance applicant was bound to reveal. Moreover, it could not find a single witness who ever experienced aggressive behavior by one of Matt’s dogs.
The moral of this story is simple: Life insurance companies will stop at nothing to avoid paying out on legitimate claims. Just because you’ve received a claim denial letter in the mail does not mean you cannot get the money intended for you.
Our firm practices exclusively in the area of wrongful denials of life insurance claims. If you have received a decision that seems off to you, please call us. We’ll evaluate your case and, if we think the denial you received was bogus, we’ll represent you with no out-of-pocket costs unless and until you recover from the insurance company. Call today. We’re here to help.