As lawyers who specialize in the wrongful denial of life insurance claims, our practice is focused on helping life insurance beneficiaries get wrongful claim denials overturned. And let us tell you, we see bogus claim denials every single day. In fact, sometimes the reasoning for a life insurance claim denial is so ridiculous that we can hardly believe our eyes and ears. Those are the cases that keep us motivated to fight for our clients day in and day out.
There are some cases, however, where a life insurer’s claim denial decision is not completely irrational. It may be the wrong decision but it was made for the right reasons. In those situations, we don't need to go for the jugular in fighting the insurance company. Rather, the best way we can serve our clients is to reach a compromise with the insurance company that balances the beneficiary’s rights against those of the insurance company.
This article explains one case where the lawyer’s job was centered on skillful negotiation and compromise. One of the signs of a great lawyer is knowing when to fight and when to seek a rational middle ground. Sometimes, when an inexperienced lawyer creates a big fight when an environment of cooperation would best serve the client, the lawyer can actually harm a client's position.
A devastating typo
The case involved a woman named Nancy. Nancy was in her late 70s at the time she passed away. Just about one year before Nancy died, she moved from the home she had lived in for over 40 years and moved to an apartment that was close to her daughter’s home in another state.
Always dutiful about taking care of bills and such, Nancy spent a great deal of time mailing “Change of Address” notifications to her credit card companies, insurance companies, and any magazines that she subscribed to. Even though most of those companies offered online Change of Address services, Nancy was old-school and preferred to do those sorts of things by hand.
Unfortunately, when Nancy filled out the change of address form for her life insurance company, she incorrectly wrote down her new address. While she intended to write 4301 East Kings Rd., she accidentally wrote 4302 E Kings Ave. Her new town had streets bearing both names. On E Kings Ave., however, there was no building with the address number 4302.
Consequently, when the life insurance company mailed its monthly invoices to Nancy for premium payments, each piece of mail was returned as undeliverable. Nancy had not provided the insurance company with her new phone number, so it was unable to reach her to clear the mistake.
Meanwhile, Nancy's health deteriorated quickly as soon as she moved to the new apartment. She was not well enough to care for her own daily needs, let alone think or worry about the fact that she wasn't receiving life insurance premium statements. Consequently, her monthly premiums were going unpaid, the insurance company was sending notices of non-payment and intent to cancel, and Nancy simply had no idea any of that was happening.
The tragedy of the situation was compounded by the fact that this was a life insurance policy Nancy had been paying on for over 30 years. Prior to her move, she had never missed a single payment. Sadly, due to the typographical error and her declining health, the insurance policy was eventually cancelled.
A surprise claim denial
After Nancy passed away, her daughter Susie was not surprised to find a careful set of instructions Nancy had written about how her daughter was to take care of her affairs. One of the items on that list was the name, address, and telephone number of Nancy’s life insurance company with a notation that read: “$475,000 policy in your name.”
Susie went to the life insurance company's website and got all the information she needed about how to file a claim. She submitted the claim online and expected to receive a check in the mail within a few weeks. To the contrary, she got a claim denial letter that surprised her very much.
The letter stated that Nancy had stopped paying her premiums on the policy and had not responded to notices of non-payment. Susie had always known her mother to be exceptionally diligent about paying her bills. In fact, during Nancy’s last few months on Earth, Susie had helped her mother open mail and pay any bills that needed to be taken care of. She didn’t remember seeing any life insurance statements or notices of non-payment from an insurer.
That day, Susie contacted a lawyer specializing in the wrongful denial of life insurance claims and the lawyer agreed to contact the insurance company on her behalf. At the lawyers request, the insurance company sent over Nancy's entire policy file. Upon reviewing the file, it became very clear what had happened. Nancy had provided the wrong address to the insurer and thus had stopped receiving statements and notices. It was a simple, yet devastating, mistake.
The lawyer knew that the insurance company’s cancellation of the policy was well within its rights. From a justice standpoint, however, it simply wasn't fair that Nancy paid on the policy faithfully for over 30 years and then had her entire claim denied based on a typographical error.
The attorney offered the insurance company a compromise: it would pay the full policy payout to Susie, minus the amount her mother would have paid in premiums if the mistake had not been made. Fortunately, the lawyer was working with an in-house attorney from the insurance company that she’d dealt with many times before. Indeed, the two had great respect for one another. The in-house lawyer agreed that the compromise was a good one, and instructed the insurance company to pay Susie the agreed upon sum.Sometimes claim denials really are the result of an honest mistake. If you have received a claim denial under similar circumstances, please contact our firm. We’ll do everything in our power to remedy the mistake and get you a just payout that reflects the wishes of your loved one. Call today. We’re here to help.