As lawyers who specialize in the wrongful denial of life insurance claims, we have seen just about every trick that life insurance companies use to avoid paying claims. Oftentimes, these companies will issue firm claim denials that are as ludicrous as they are frustrating to policy beneficiaries.
In other cases, however, the insurance company doesn’t make an outright denial of the claim. Instead, they drag their feet in an endless game of “investigations” into the insured’s cause of death. This is especially likely to happen in cases where the insurance company believes they can make even a slightly plausible argument that the insured committed suicide or that the death fits within some other policy exclusion.
Sadly, these delays occur even though most state laws require a life insurer to either pay a claim or issue an outright denial within 60 days. They do this because they know that in most cases, they can get away with it. Remember, the longer an insurance company can avoid paying out a large death benefit, the more profits they reap at the end of the year.
This article explores one case where the life insurance company was engaging in a maddening game of endless delays.
A bright future for a bright young man
This case involved a young man with a very promising future. David had been a competitive swimmer since he was 10 years old. By the time he was ready to enter college, he had multiple offers for full ride scholarships to some of the nation’s top universities. Everyone thought that he was a sure bet for the upcoming Olympic games and that he would earn millions of dollars as a product spokesman.
In light of his potentially lucrative future, David’s parents, Ron and Sandy, took the somewhat unusual step of taking out a life insurance policy on a young and healthy man. In fact, David was just 17 years old when they insured his life for over $4 million. They never hoped to have to use the policy, but knew it would help them recoup the massive amounts of money they had spent on David’s swim lessons and travel should their son meet an early demise.
Unfortunately, that is precisely what happened. David had just started college at a major university and immediately earned himself the reputation as the hardest worker on the team. He often showed up at the university practice facility several hours before his peers. He liked to swim alone and felt he got some of his best practice time in that way.
One morning, David’s swim coach arrived at the practice facility to a horrifying scene. David was floating face down in the pool. The coach could see that his body was blue and lifeless. He immediately called 911. Within a few minutes, the police and paramedics were on the scene. David was pronounced dead almost as soon as they got him out of the water.
A suspicious death to be sure
There was no doubt that David’s death was suspicious. His autopsy did not reveal any drugs or alcohol in his system. The only thing the coroner found that might be linked to his death was a blunt-force trauma to the back of his head. The coroner’s report stated that the wound might have been due to another person striking David with a blunt object, but that it was more likely he hit his head as he jumped into the pool. Consequently, the coroner listed David’s official cause of death as “accidental.”
Beside themselves with grief, David’s parents nonetheless filed a claim for death benefits with the life insurance company. Given all the publicity surrounding the death, the assigned claims adjuster was somewhat familiar with the case when the claim form came in. He also knew there were rumors that the death was not accidental.
Consequently, the adjuster almost immediately sent a letter to Ron and Sandy saying that payment could not be made on the claim until the insurance company undertook its own investigation into David’s cause of death. In particular, the adjuster noted the possibilities that: (a) David committed suicide by jumping into the pool in a way that would purposefully injure his head; or (b) David’s parents, having just taken out the life insurance policy on David, were somehow complicit in his death. If either of those variables were true, the insurance company would have no obligation to pay their claim.
An unending investigation
Technically, the insurance company’s reasoning was sound under the circumstances. The language of David’s policy gave the company the right to perform its own investigation. What happened next, however, was not permissible or fair under any circumstances.
For over three years, the insurer refused to make a decision about the claim. While it appeared to make some investigatory efforts shortly after the claim was filed, those efforts fizzled out over time. Nonetheless, every time Ron or Sandy asked about their claim, they were told to be patient.
Finally, Sandy had had enough. She contacted a lawyer specializing in the wrongful denial of life insurance claims. He immediately saw that the delay was not only abusive, but also ran afoul of a state law requiring a firm decision with 90 days of submission of a claim.
The lawyer filed suit against the insurer and the case quickly settled in favor of David’s parents. It turned out that no evidence of suicide or homicide was ever discovered by the insurer or the police. After three years, the coroner’s accidental death ruling was still the final word on David’s death. The insurer was simply trying to avoid the $4 million payout.Unfortunately, these sorts of delays are not unusual. If you’re facing a long delay in the decision about a life insurance claim, please call us so we can help you get a resolution from the insurer. More often than not, a little prompting from a specialized attorney is all it takes to get your claim resolved.