Many Americans use life insurance as a form of financial planning. It is especially popular for families who have one main breadwinner. It makes sense if you think about it. The family takes out a policy on the breadwinner’s life and when that person dies, the beneficiaries receive a payout that helps keep them financially secure.
Of course, life insurance, like other types of insurance, comes with options. One option in particular is popular among young families who don’t anticipate having the main breadwinner die of natural causes in the near future. It is called an Accidental Death & Dismemberment Rider (“AD&D Rider”). With an AD&D Rider, the policyholder’s beneficiaries typically receive three times the normal policy payout in the event that policyholder dies as the result of an accident. Thus, if the policy amount is $1,000,000 and the insured dies in an accident, his beneficiary would receive that $1,000,000 plus an additional $3,000,000.
As you can imagine, life insurance companies are not thrilled when they have to pay out on an AD&D Rider. Consequently, any time a beneficiary makes a claim with an AD&D component, the life insurance company undertakes its own investigation – typically with the end goal of “proving” the death was not due to an accident. They do this, of course, to avoid making the larger payout.
This article explores one recent case where a life insurance company and a policy beneficiary had to battle over whether the AD&D Rider should apply given the circumstances of the policyholder’s death.
A tragic ending for a young pilot
The case involved a policyholder named Steve. Steve was a successful accountant in his late 40s. He was married to a woman named Stacey and together they had three children. In his spare time, Steve was an amateur airplane pilot. Over the course of a few years, he obtained his pilot’s license and even managed to purchase a small airplane.
Through the years, Steve developed a habit of going flying by himself every Saturday morning. Come rain or shine, he made the conscious effort to put in at least two hours flying time each week. One Saturday, in fact, Steve set out for his weekly outing notwithstanding heavy rain and a strong crosswind. His wife had asked him to skip that week’s trip, but Steve was nothing if not dedicated to his hobby.
Unfortunately, the worst case scenario came true for Steve and his family that Saturday. He had enjoyed nearly 90 minutes of flying when he decided to loop back to his local airport. Everything was going as smoothly as it could in that weather. Steve called his wife just prior to making his descent and told her he was feeling fairly strong anxiety about the landing given that a dense fog had settled over the airport since his takeoff. Nonetheless, he assured Stacey that the instruments on his airplane would all but land the aircraft for him.
Shortly before he touched ground, however, a strong wind blew directly perpendicular to Steve’s plane, which caused one wing to rise sharply. As it did, the other wing hit the runway and Steve’s plane tumbled into a fiery crash. Though witnesses got to the wreckage quickly, they found Steve lifeless. Paramedics arrived on scene within moments and declared Steve dead at the scene.
An unwanted life insurance dispute
Prior to his death, one of the benefits of Steve’s employment was a high-dollar life insurance policy. He was insured for $500,000 with an AD&D Rider worth an additional $1,500,000 that would be paid if Steve died in an accident. The policy was important to Steve and his family as he and Stacey had decided that she would stay home full time to raise their three children.
Not surprisingly, within weeks of Steve’s death, Stacey (Steve’s sole beneficiary) made a claim against the policy and the AD&D rider. As required by the insurance company, her claim included submission of Steve’s death certificate, autopsy report, and official accident reports relating to his accident.
When the claims adjuster for Steve’s life insurer reviewed those documents, he noted that the autopsy report revealed Steve had suffered a heart attack just prior to the accident. The report also stated that it was unclear whether the heart attack had caused Steve’s accident or whether Steve had suffered the heart attack knowing that the accident was imminent. The accident reports noted the unusually bad weather, including the strong crosswind that hit Steve’s aircraft just prior to the crash.
Ignoring the later reports, the adjuster decided that Steve had died as a result of the heart attack and not as the result of the crash. As such, he denied that portion of Stacey’s claim stemming from the AD&D rider.
Luckily, Stacey’s brother Mark was an attorney specializing in the wrongful denial of life insurance claims. When he caught wind of the AD&D claim denial, he immediately saw that the insurance company was simply trying to play games to avoid making that lucrative portion of the payout. When his negotiations with the insurance company went nowhere, Mark sued the insurer on Stacey’s behalf.
At trial, Mark argued that although there was evidence that Steve had a heart attack at some point, there was absolutely no evidence proving that the heart attack was what caused Steve’s death. He also presented evidence regarding the dangerous winds present just prior to the crash. Attorneys for the life insurance company tried to place emphasis on the heart attack, but they were ultimately unable to establish as causal link between the attack and Steve’s death. At the end of the trial, the court ordered the insurer to pay Stacey all benefits due, including the full sum owed under the AD&D rider.If you have received a denial letter relating to an AD&D Rider, please don’t hesitate to call our firm. We specialize in contesting the wrongful denial of such claims and would be honored to help you get the death benefits your loved one intended for you. Call us today. We’re here to help.