Let's face it, life insurance companies are in business for one reason: to make money. There's nothing wrong with that per se. As lawyers who specialize in the wrongful denial of life insurance claims, however, we know that life insurance companies spend an awful lot of money on lawyers whose sole job is to come up with reasons why claims against their policies can be denied.
In fact, there is a whole department of lawyers within most life insurance companies who spend their days dreaming up policy exclusions. These exclusions are intended to give the insurance company the best chance of denying claims. Unfortunately, that also means that their job is to deny beneficiaries the financial security their loved one intended for them.
In many instances, the policy exclusions make sense at face value. For example, most policies contain a suicide exclusion. We can all understand why an insurance company would not want to issue a policy only to have the insured quickly kill himself in an effort to bring his family financial security. In reality, however, life insurance companies often invoke the suicide exclusion even when official reports indicate the insured did not cause his own death.
The case we are discussing today involves an exclusion that also makes sense at face value. Once again, however, the case is a stark reminder that life insurance companies often rely on these exclusions in circumstances where notions of equity and justice would dictate a different result.
Hardly a hardened criminal
This case involved a man named Brian who was in his mid-60s. Brian was a welder and had been employed by the same construction company for over 30 years. As part of his benefits package, Brian received a life insurance policy worth $250,000. When Brian first signed up for the policy, he named his wife Janice as the sole beneficiary.
Like most people, neither Brian or Janice ever read the fine print of the policy. Had they done so, they would have realized that it contained several exclusions under which the insurance company might be relieved from making a death payout when Brian died. Among those exclusions was one entitled the “Criminal Activity Exclusion.”
That exclusion stated that the insurance company would not have to pay a claim against Brian’s policy if he died while engaged in any criminal activity. In truth, Brian and Janice were a rather conservative couple and the thought of Brian committing any crime was almost laughable. In fact, Brian was what many people would consider a “good old boy.” He liked to hunt, fish, and go on camping trips with his family. He was also an avid gun enthusiast. Nonetheless, he was not a big fan of the government and therefore did not concern himself with things like obtaining permits for his guns.
A claim denial no one expected
Sadly, just shy of his 64th birthday, Brian was involved in an automobile accident. Brian sustained severe head trauma in the accident and was airlifted to a nearby hospital. Because the other driver was suspected of driving under the influence, the police did a thorough investigation of the scene. As part of the investigation, police recovered three large handguns from underneath the front seat of Brian’s truck. They noted that discovery in their report but did not cite Brian for a violation of the state’s concealed carry laws because he ended up passing away just six days after the accident.
A few weeks after Brian’s death, Janice submitted a claim to his life insurance company. The claims process required that Janice submit a certified copy of Brian's death certificate along with any police reports or autopsy reports regarding his death. Therefore, Janice submitted, among other things, a copy of the police report concerning the accident.
Approximately one month later, Janice received a claim denial letter in the mail. Janice was shocked. The letter stated that the insurance company was denying her claim based on the Criminal Activity Exclusion in Brian’s policy. Specifically, it stated that because Brian died while possessing unpermitted guns, he was committing a crime during the accident. Since that accident caused his death, the claim had to be denied.
This reasoning made absolutely no sense to Janice. She asked around and was eventually referred to an attorney who specialized in the wrongful denial of life insurance claims. The attorney listened to Janice’s story and read all of the documents pertaining to the situation, including the police report. He decided to take on her case but informed Janice that overturning the claim denial would not be a slam dunk.
In a hearing in front of the life insurer’s internal appeals board, the attorney argued that if Brian had died at the scene of the accident, the Criminal Activity Exclusion may have justified a claim denial. Here, however, Brian died six days removed from the accident. He was not in illegal possession of any weapons at the time of his death, and the exclusion expressly applied only when the insured died “while engaging in criminal activity.”
To allow the life insurance company to deny Janice’s claim would mean that a life insurer could deny anyone’s claim so long as the policyholder had committed any crime at any point in his life. Surely, he argued, the law would not support such a result.
Ultimately, the appeals board agreed with the attorney’s reasoning and awarded Janice the full $250,000 benefit. It was a just result. This case just goes to show that insurance companies will sometimes deny claims even when their own policy language suggests they should not. That is why it is so critical to contact a specialized attorney whenever you are faced with a life insurance claim denial.We see cases like this every day and we know that an unfortunate number of people walk away from policy benefits just because they don't think they can contest the claim denial letter. We assure you, you can. We do it all the time and we have an outstanding track record of success. If you have recently had a life insurance claim denied, call us so we can discuss the situation. We are here to help.