As attorneys who specialize in the wrongful denial of life insurance claims, we probably see one reason for claim denials more than any other – alleged material misrepresentations made by the insured during the policy application process. Material misrepresentations are more than little white lies. Legally speaking, they are lies that are so significant that had the insurance company known the truth, it never would have issued a policy (or it would have charged much higher premiums on a policy it did issue).
Because we practice in this area all the time, we are very aware that insurance companies will often claim that a mistruth in the application was material, even when it truly was not. They do this because life insurers don’t get rich by paying out claims. They make the greatest profits when they can collect premiums from policyholders for years on end only to deny claims made by beneficiaries when the policyholder dies.
In light of their profit-driven motives, life insurance companies are famous for issuing legally unsupportable claim denials. Alleging material misrepresentations is one of their favored weapons for deploying this strategy. This article explores a couple of the alleged material misrepresentations that have been successfully contested through the years.
Fibbing about weight
Let’s be honest, most of us have fibbed about our weight at some point in our lives. In fact, we’d venture to guess that fewer than 25% of driver’s licenses list the driver’s true weight. The reasons people do this are plentiful. We all want to appear healthier than we are, society puts tremendous pressure on us to remain thin, and some of us are just in plain old denial.
When it comes to life insurance, however, weight truly does matter. In part, insurance companies make decisions about policies and premiums based on whether or not a person is technically obese. This seems logical as several critical diseases are influenced by a person’s excessive weight. Unfortunately, life insurance companies also frequently use weight as the basis for claiming a policyholder made a material misrepresentation in his life insurance application.
In one case, a 42 year-old man named Tom had claimed in his policy application that he was 6’2” and weighed 180 pounds. In truth, he weighed closer to 190 at the time, but his weight fluctuated quite a bit.
Tom died of a freak heart attack at the age of 43. No one saw it coming. When his wife made a claim for life insurance benefits, the insurance company undertook an investigation into Tom’s life. Given that Tom had paid premiums for just over a year when he died, the insurance company was sure to lose money if it paid his wife the full policy payout of $400,000.
In scouring Tom’s social media accounts, the insurer found a picture that Tom had posted at around the time he applied for life insurance. In it, Tom was at his heaviest. The picture was captioned “This fatso weighed in at 265 pounds!” Citing that photo, along with a copy of Tom’s life insurance application, the insurance company denied his wife’s claim. The insurer claimed that it “never would have issued a policy to Tom if [the company] knew he was obese at the time of his application.”
Tom’s wife was shocked. She remembered when Tom posted that photo – and knew that it was taken nearly 20 years earlier, when Tom was in college. Though she tried to reach the insurance adjuster who sent the denial letter, he never returned her calls.
Fortunately, she turned to an attorney who specializes in the wrongful denial of life insurance claims. He immediately contested the denial with the insurer’s internal appeals board. He was able to prove not only that the photo was 20 years old, but also that in a physical exam Tom had taken just four months before he applied for life insurance, his weight was listed at 186. A six-pound difference was hardly the sort of “material misrepresentation” that would warrant a claim denial. Faced with this indisputable evidence, the insurance company overturned its own claim denial and paid Tom’s wife the full $400,000 benefit.
Where there’s smoke, there’s fire
Another thing people often lie about is smoking. At this point, we all know it is a dirty habit that can lead to all sorts of chronic illnesses. As such, life insurance companies are hesitant to issue policies to smokers.
Consequently, many smokers try to lie about their habit when they are applying for life insurance. That was not the case, however, for a 58 year old man named Jim. When Jim applied for a policy, he truthfully denied being a smoker. When Jim died nearly two years after his policy issued, his partner Judy was shocked to receive a claim denial letter in the mail that was based on Jim’s “material misrepresentation about being a smoker.”
Judy immediately contacted an attorney specializing in wrongful life insurance claim denials. She explained to the attorney that she had known Jim for 25 years and had never seen him smoke a cigarette or a cigar. The attorney agreed to pursue her case.
He learned that the insurance company based its denial on one picture of Jim that he had posted on Facebook. It was from a Halloween party five years before his death. That year, Jim and a friend had dressed as the “Blues Brothers.” Jim had used a cigarette – which he never lit – as a prop. The attorney gathered sworn statements from people at the party, as well as people who had known Jim for decades. They all stated under oath that they’d never seen Jim smoke. Fortunately, that was enough to have the claim denial overturned.If you’re facing a life insurance claim denial based on a bogus claim of material misrepresentations, call us today. Chances are, we can work with your insurance company to get that denial overturned. If not, we’re happy to take the company to court on your behalf. Call today. We’re here to help