Our firm recently secured a full three hundred fifty thousand dollar life insurance payout after Pacific Life denied the claim and attempted to rescind the policy. The denial was based on an alleged failure to disclose a prior legal issue on the life insurance application. Pacific Life claimed the omission amounted to a material misrepresentation and asserted it would not have issued the policy had it known the full history.
After a comprehensive review of the application, underwriting file, claim investigation materials, and internal guidelines, we determined the denial was legally unsupported. The conviction at issue was nonviolent, remote in time, and unrelated to the cause of death. More importantly, Pacific Life’s own underwriting practices showed that similar applicants were routinely approved for coverage. Faced with these facts and the governing law, Pacific Life reversed its position and paid the full death benefit.
This case highlights how insurers misuse application questions about criminal history during the contestability period to justify rescission.
Why Insurers Focus on Criminal History After Death
Life insurance companies treat criminal history as a proxy for risk, even when the offense has no connection to health, longevity, or cause of death. Application questions about arrests or convictions are often broadly worded and poorly explained. Applicants may reasonably believe that minor or old offenses do not need to be disclosed, especially if they resulted in no jail time or were later expunged.
After a death occurs, insurers frequently reexamine these questions and search public records for anything they can characterize as nondisclosure. If they find a prior conviction that was not listed, they often leap directly to rescission without analyzing whether the omission was truly material.
In this Pacific Life case, the insurer relied on that exact tactic.
What Made the Pacific Life Denial Legally Defective
The insured had a misdemeanor conviction from years before the policy was issued. The offense involved no violence, no ongoing supervision, and no pattern of repeat conduct. The insured lived a stable life, maintained employment, and had no subsequent legal issues.
Pacific Life argued that the conviction alone justified rescission. That argument failed for several reasons:
• The application question was broadly phrased and did not clearly explain what needed to be disclosed
• The conviction had no relationship to mortality risk
• The cause of death was completely unrelated
• Pacific Life underwriting guidelines did not automatically disqualify applicants with similar records
• The insurer conducted no follow-up investigation before issuing the policy
We demonstrated that Pacific Life could not show it would have declined coverage or altered the policy terms had the conviction been disclosed. Without that proof, the denial could not stand.
Materiality Is the Legal Standard, Not Perfection
Life insurance law does not require applications to be perfect. It requires insurers to prove materiality. A misstatement or omission is only grounds for rescission if it would have changed the underwriting decision.
In criminal history cases, insurers often assume materiality without evidence. They rely on internal assertions rather than actual underwriting data. In this case, we obtained underwriting comparisons showing that applicants with similar convictions were approved at standard rates.
That evidence alone undercut Pacific Life’s claim that the omission justified rescission.
Waiver and Failure to Investigate During Underwriting
Another key issue was Pacific Life’s access to information at the time the policy was issued. Public records searches would have revealed the conviction during underwriting. The insurer chose not to conduct that investigation and issued the policy anyway.
When an insurer has the ability to discover a fact but issues the policy without doing so, courts often find waiver. An insurer cannot ignore available information, accept premiums, and then use that same information as a basis for denial after death.
We made that argument directly, and Pacific Life had no effective response.
Criminal History Omissions Are Often Misunderstood by Applicants
Applicants frequently misunderstand criminal history questions for legitimate reasons:
• They believe only felonies count
• They assume old or expunged matters are irrelevant
• They misunderstand whether arrests versus convictions must be disclosed
• They rely on agents who minimize the importance of the question
Insurers know this. Yet they still treat these omissions as intentional deception once a claim is filed.
The Pacific Life case is a clear example of how that approach breaks down under legal scrutiny.
Why These Denials Are Common During the Contestability Period
The contestability period gives insurers an incentive to search for any possible basis to rescind a policy. Criminal history questions are attractive to insurers because they involve objective records that can be pulled quickly after death.
But the presence of a record does not automatically equal material misrepresentation. Each case requires analysis of:
• The nature of the offense
• The time elapsed
• The underwriting guidelines in effect
• Whether the insurer would have issued the policy anyway
• Whether the insurer waived the issue by failing to investigate
In this case, every factor favored the beneficiary.
Legal Advocacy Is Often the Only Way to Reverse These Denials
Pacific Life did not reverse its decision voluntarily. It did so only after being confronted with underwriting evidence, legal authority, and a clear explanation of why its denial would fail in court.
Many beneficiaries never get that far. They accept the denial letter, assume the insurer is correct, and walk away from substantial benefits.
This three hundred fifty thousand dollar recovery demonstrates that denials based on alleged criminal history omissions are not always justified and are frequently reversible with the right legal approach.
If a life insurance claim has been denied based on an alleged failure to disclose legal history, that denial deserves close review. In many cases, the insurer’s position is far weaker than it appears.