Life insurance companies are notorious for denying claims based on bad faith reasoning. As lawyers who specialize in the wrongful denial of life insurance claims, we see this in practice every day. While bogus claim denials are always disheartening, sometimes they are downright sad. That's one of the reasons we do what we do for a living. There is no greater satisfaction then helping someone who is truly in need.
We recently learned of a case that was particularly sad. The life insurance company had the opportunity to do the right thing but chose profits over people instead. Fortunately, a specialized lawyer was able to step in and help the beneficiary in that case – a girl who was facing a major life dilemma and could not access the life insurance benefits intended for her.
Orphaned as a teenager
Most of the time when we discuss interesting cases involving life insurance, we begin by telling our readers about the policyholder. This case is different. The most interesting aspect of the case was actually the beneficiary. Her name was Tiffany and she was the designated beneficiary under life insurance policies held by her mother and her father.
In many respects, Tiffany was a very normal 16 year-old girl. She was popular in high school, a varsity track athlete, and a member of the school band. She got straight A’s in school, which was important because she would need to get a scholarship if she ever hoped to realize her dream of going to college.
Just two months before the end of her junior year in high school, Tiffany’s parents decided to take a weekend getaway to the coast. The couple had struggled financially for years and had finally saved up enough to take a small getaway. Tiffany was such a good kid that they didn't have a moment's hesitation about leaving her home alone for the weekend.
On Friday evening, the couple headed out on the two-hour drive that would take them to their hotel. Tragically, Tiffany's parents would never return from that trip. About a half hour into their drive, a semi-truck crossed over the median of the highway and hit their car head-on. Both of Tiffany’s parents were killed instantly.
An estate plan thwarted
Tiffany was obviously devastated by her parents’ death. Nonetheless, she was a strong and independent young woman and she was determined to make it on her own. She didn't have any family nearby so she asked for help from a neighbor when it came to arranging her parents’ funerals and doing administrative tasks like submitting life insurance claims with their insurance company.
Tiffany didn't know anything about life insurance but she had no reason to believe her claim would be denied. Unfortunately, within a matter of weeks she received a letter from the life insurance company that contained bad news. According to the insurer, it was legally prohibited from paying out a claim to a minor. In light of this, the insurance company planned to hold the money Tiffany was owed until she reached the age of 18.
Between the two policies, that amount totaled $500,000. Significantly, it was the only money that Tiffany had to live on. She didn't have a job, didn't have any other source of income, and her parents’ bank account only had $400 in it at the time they died. In other words, Tiffany was in dire straits.
She had no real idea what to do except to possibly contact a lawyer. She did some quick research online and found a lawyer specializing in the wrongful denial of life insurance claims. She spoke to him and conveyed the emergency nature of her situation. Unfortunately, the lawyer had seen cases like this before and he knew that technically, the life insurance company was correct. It was not supposed to release funds to a minor.
He also knew that the life insurance company could have done more to inform Tiffany of her rights but chose not to because it didn't want to payout a half million dollars in claim benefits. Fortunately, the lawyer knew just how to help. He immediately contacted a family law lawyer who began the process of having a guardian appointed for Tiffany. Although she desired to retain her independence, it was the only way she was going to get access to that money before her 18th birthday.
Once the guardianship was in place, the life insurance lawyer contacted the life insurance company. He presented them with evidence of the newly-formed guardianship and demanded that payment be made to Tiffany immediately, including any interest that was owed from the time her parents passed away. If the insurance company failed to make the payment quickly enough, he cautioned, he would have no trouble taking them to court.
Ultimately, Tiffany's situation turned out as best it could under the circumstances. The life insurance company did release the $500,000, plus interest, within a week of the lawyer’s stern communications. Of course, that was never going to bring Tiffany's parents back but at least it allowed her to survive and have some measure of financial security as she entered adulthood.
Well the life insurance company in this case was technically correct in its decision, its execution on that decision was downright cruel. Someone at the company could have taken the time to pick up the phone and help this young girl figure out what she needed to do. Just because the company was unable to pay Tiffany at age 16 didn't mean there was not a way to get the money released faster.If you have had a life insurance claim denied, please do not assume the insurance company’s denial decision is correct or final. Our specialized team of lawyers are happy to provide you with a free consultation. If we believe your claim denial can be overturned, we will diligently take on your case. Best of all, you won't have to pay us a dime unless until you receive money from the insurance company. Call us today. We're here to help.