Our law firm practice focuses on contesting the wrongful denial of life insurance claims. If you have followed our blog at all, you know that a frequent topic of discussion is whether a policyholder made “material misrepresentations” during the life insurance application process. There are a couple of reasons we discuss this topic so often. We handle all insurance claim denials and beneficiary disputes.
First, we understand that people have a natural inclination to tell little white lies. For example, let’s say a person is embarrassed about how much alcohol they drink each week. That person will be tempted to underestimate their level of consumption when applying for life insurance. We understand that most people think that misrepresentation is no big deal.
In truth, however, the amount of alcohol a person drinks is important to a life insurance company. In addition to the health detriments of alcohol, frequent consumption increases the likelihood that someone will die in a car accident or other alcohol-related incident. Thus, if someone is a heavy drinker, they may not be eligible for a policy or will be required to pay higher premiums than non-drinkers. And, if a person lies about the amount they drink, an insurance company may issue them a policy to which they are not otherwise entitled.
In fact, that impact on the insurance company’s decision making process is what makes the lie “material” and is what can provide the insurance company with a reason to deny a claim against that policy down the road.
The second reason we discuss material misrepresentations so much is that life insurance companies over-rely on this justification for denying claims. Not all misrepresentations are material. Similarly, not all material misrepresentations are intentional. In either case, the misrepresentation may be insufficient to render the policy valueless. That’s where we come in.
This article discusses a case where a misrepresentation was not enough to cancel out a policy. It also illustrates why it is so important for those who have received life insurance claim denials to retain an experienced lawyer to help with their cause.
Head injuries are no joke
This case involved a man in his late-40s named Joel. Joel was, for all intents and purposes, the portrait of health. An avid cyclist, Joel was thin and fit, he ate healthy foods, and he avoided vices like cigarettes and alcohol. Therefore, when he applied for a life insurance policy, one would assume he was a prime candidate for a large policy with low premiums. In fact, after filling out a lengthy health questionnaire, the insurance company issued him a policy with no reservations.
There was one question in that form, however, that Joel unintentionally failed to answer truthfully. The question read, “Have you ever had an accident (or accidents) from which you have ongoing health issues?” Joel answered “no” to the question, even though he had taken three hard spills on his bicycle in the past year. In each instance, Joel’s head hit the pavement and he counted himself lucky that he was wearing a helmet. He’d seen what happened to people in similar crashes who weren’t wearing a helmet and he didn’t want any part of that.
Joel was so proud to survive those crashes, in fact, that after each instance, he posted pictures of himself on social media holding a cracked bike helmet, smiling, and saying something like “lucked out again!” Even though he suffered headaches and dizziness for a few days following each crash, Joel had no idea there was any ongoing issue with his health. In fact, Joel kept a bicycling journal in which he logged miles, rides, nutrition and things like crashes. Several times within that journal, Joel noted how fortunate he was to have “completely escaped injury.”
No one saw it coming
A little over a year after Joel received his life insurance policy, he died suddenly from a stroke. Given that he was relatively young and in such good health, everyone around him was shocked. An autopsy, however, revealed that Joel’s stroke was likely the result of multiple traumatic brain injuries that caused clotting in his cranial arteries.
Joel’s wife Jen, who was the sole beneficiary under his life insurance policy, made a claim with the life insurer. As required, she submitted his death certificate and the autopsy report.
A few weeks later, Jen received a claim denial letter in the mail. The claims examiner explained that since Joel had died within the first two years of the policy, the insurer had a right to investigate his life to see if he had made any misrepresentations to the company during the application process. During that investigation, the insurer discovered Joel’s social media posts regarding his bike crashes. In light of those, the claims examiner stated, it was “clear” that Joel had made a material misrepresentation when he told the insurer he didn’t suffer from any ongoing health issues resulting from accidents.
Jen was beside herself. She knew Joel had been in the crashes, but there was never any indication he had “ongoing” problems. She called a lawyer specializing in the wrongful denial of life insurance claims. He told Jen that it was going to be hard to prove what Joel “didn’t know” about his condition but that she should look through any of his personal writings anyway. In that process, of course, she found Joel’s cycling journal and his multiple entries about how lucky he had been.
That was enough for the attorney to file an appeal with the insurer’s internal appeals board. He used Joel’s own journal to argue that the man had no idea he was suffering from long term effects of his crashes. The claims adjuster was unable to provide any evidence suggesting Joel did have such knowledge.
Ultimately, Jen won the appeal and was paid under the policy. That outcome would have been highly unlikely had she not retained an attorney experienced in these matters.If you have had a life insurance claim denied and you’re not sure if the decision can be successfully overturned, call us today. We’re here to help people exactly like you.