Much has been written about the prescription drug problem in the United States. Painkillers, in particular, seem to be impacting communities that formerly seemed to be shielded from the influence of illegal drugs. These days, you can’t open a newspaper without seeing that another suburban housewife has been arrested for prescription drug abuse.
You better believe that life insurance companies have taken note of this trend. While policies have long included provisions relieving an insurance company from making a payout in the event a policyholder died while taking illegal drugs, policies have been changed in recent years. Now, insurance companies are writing in exclusions that eviscerate their obligation to pay even if a policyholder dies while taking a prescription drug. Many policies, however, limit that exclusion so that it only applies if the insured was taking a prescription drug that was not actually prescribed to him.
In one recent case, a life insurance company tested the limits of just such a policy exclusion. Fortunately, the beneficiary who received a denial letter from that insurer did the smartest thing he could do – he called a lawyer specializing in the wrongful denial of life insurance claims. As you’ll see, the situation ended well for that beneficiary but could have gone the other way if he’d not sought appropriate help.
A woman whose clumsiness got in the way
Jill was a 53 year old woman when she passed away. She had enjoyed a fabulous career as the director of a large organization. She had been married for 30 years to Keith. Interestingly, Jill was the sole breadwinner in the family. As such, she had a sizeable life insurance policy. In the event of her death, Keith was to receive a $600,000 payout.
In an almost comical way, Jill was known among her friends as being exceedingly clumsy. While she loved outdoor sports, she always managed to roll her ankle or tweak her knee. More often than not, Jill would return from some adventurous vacation with Jill hobbling along on crutches.
Such was the case in the Spring of 2004 when the couple went to Canada to do some skiing. Jill managed to take a bad spill and tear a knee ligament. When they returned to the U.S., she had a rather extensive knee surgery. As part of her follow-up care, her doctor gave her a prescription painkiller known as Vicodin. The prescription was for 30 pills, with two 30-pill refills that she could fill within the next few months, if needed.
Even though Jill enjoyed a remarkable recovery and never even finished her first bottle of Vicodin, she went ahead and ordered the two refills from her local pharmacy. Knowing how often she injured herself, she thought it would be a good idea to have the painkillers on hand so she might avoid a trip to her doctor following her next calamity. Each bottle of Vicodin she obtained had a product expiration date in 2006.
In 2007, Jill and Keith went backpacking in a remote area of California. Perhaps predictably, Jill wound up rolling her ankle and spraining it rather severely. When the couple returned home, Jill got out one of her bottles of Vicodin and began taking it according to the instructions on the label. Jill was by no means an addict, she simply wanted to relieve the throbbing pain in her ankle.
An unexpected accident
Two weeks later, Keith and Jill were back to their adventures. The couple was hiking in a national park near their home when Jill tripped over a loose rock. This time, however, she careened down a steep hillside before Keith was able to catch her. She tumbled downward for approximately 55 feet. Rescue crews had to be called to the scene. Unfortunately, they found Jill dead at the bottom of the ravine.
As standard procedure, the sheriff ordered an autopsy to rule out any foul play. While the autopsy confirmed that Jill died from a blunt-force injury sustained during her fall, it also revealed that Jill had Vicodin in her system at the time of her death. It was not an elevated level. Rather, it was indicative of use for treatment of an injury.
When Keith filed a claim with Jill’s life insurance company, he was required to submit a claim form, a death certificate, and any formal reports regarding Jill’s death. As such, he submitted the autopsy report. In light of the Vicodin in Jill’s bloodstream, the life insurance company began an investigation into the circumstances of her drug use. Of course, the insurer discovered that her last Vicodin prescription had been issued in 2004 and that all of that medication expired in 2006.
Consequently, the life insurance company denied Keith’s claim. To justify its decision, it invoked the prescription drug exclusion. Specifically, the company claimed that even though Jill had died while taking drugs that were legally prescribed to her, the prescription had expired, which made her use of it illegal.
This didn’t sit right with Keith. He immediately called a lawyer specializing in the wrongful denial of life insurance claims. He explained the entire situation, including the fact that Jill had had these pills for three years without taking them.
The lawyer filed an appeal with the insurer’s internal appeals board. Knowing that formal evidence rules didn’t apply in that setting, he literally brought Jill’s prescription bottles to a hearing, along with sworn statements from her doctors that they’d never suspected or known that Jill was taking prescription medication in an illicit way. Fortunately, those arguments persuaded the insurance company to overturn its denial.
Honestly, this case could have gone either way. Some state laws consider an expired prescription for a painkiller to be an illegal substance. The lawyer in this case knew Jill’s home state was more lenient, which may have been the deciding factor in Keith’s appeal.If you’ve had a life insurance claim denied under the same or similar circumstances, call us today. We’re here to help.