Life Insurance Lawyer Hawaii

Whether you reside in: Kaneohe; Waipahu; Kailua; Hilo; Pearl City; East Honolulu; or Honolulu; our life insurance attorneys who live and work here in Hawaii are here to help resolve your delayed or denied life insurance claim.

When you pay more for life insurance, you should be covered

If your hobbies cost you higher premiums, your beneficiaries should be protected

It goes without saying that life insurance companies, like most for-profit businesses, exist for the sole purpose of making money. One of the key strategies they employ for doing this is to collect the highest premiums possible from policyholders, while paying out the fewest amount of claims when those people die.

As attorneys who specialize in contesting the wrongful denial of life insurance claims, it never ceases to amaze us just how underhanded life insurance companies can be in carrying out this strategy. One of the best examples involves the interplay between two provisions that are used in almost all life insurance policies – the “inherently dangerous activities” clause and “intentional self-harm” clause. This article explores how life insurance companies manipulate those provisions to try to deny completely legitimate claims for death benefits.

Inherently dangerous activities

On some level, none of us are shocked that life insurance companies exist to generate revenue. Thus, it is understandable that they charge increased premiums for policyholders who have a greater chance of dying early in life than others.

A prime example of this involves what life insurers call “inherently dangerous activities.” As the name suggests, inherently dangerous activities are sports, hobbies, or other activities that put a person in somewhat regular danger of being seriously hurt or killed. They include things like downhill skiing, skydiving, SCUBA diving, motocross racing, and rock climbing.

Life insurers would go broke quickly if they treated people who engage in these activities like they treat all other policyholders. While the actual risk of dying from these activities may not be extreme, the truth is that people who engage in these hobbies die more frequently than their peers who abstain. Consequently, life insurance companies require policy applicants to reveal their participation in such activities when they are applying for insurance.

Once it comes to issuing a life insurance policy for these individuals, the insurance company charges higher premiums because of the greater risk of being injured or killed during an “inherently dangerous activity.” That seems logical.

What people expect in return, however, is that insureds who have: (a) truthfully revealed their participation in inherently dangerous activities; and (b) paid higher premiums to be insured notwithstanding those activities, will have their beneficiary’s death benefit claims paid without exception. Unfortunately, that is not always the case.

The intentional self-harm loophole

Life insurance companies do not make the payment of claims that easy. To the contrary, they purposefully write-in other policy provisions that will help them deny death benefits regardless of the policyholder’s payment of higher premiums due to their dangerous hobbies.

Specifically, life insurers consistently try to deny valid claims based on what they refer to as “intentional self-harm” clauses. A real-life example from a case out of Alaska illustrates this scheme perfectly.

A 49 year-old man named Tom sought a life insurance policy after he married his wife Rita. The policy application asked Tom if he participated in any dangerous hobbies. Tom truthfully responded that he was an avid skydiver, averaging some 50 jumps per year.

The life insurance company issued Tom a policy, but they charged him nearly 40% higher premiums than other men his age. The justification for the high premiums was that skydiving is “inherently dangerous.” Thus, according to the insurance company, Tom was at a greater risk of death than other men his age. Tom understood this and paid his increased premiums without fail each and every month.

Three years into the policy term, Tom was at a skydiving event in southern Alaska. While performing what was intended to be a routine skydive, Tom’s parachute failed to open. On that particular jump, Tom was not wearing a backup parachute. Tom died as a result of the fall. Several weeks later, his wife Rita submitted a claim for death benefits with Tom’s life insurer. Because Tom had paid so much higher premiums due to his skydiving hobby, Rita was certain the claim would be paid.

An unexpected denial

Much to Rita’s surprise, a claim denial arrived in the mail some two months later. It contained the following justification for the denial:

While we understand and agree that the policyholder paid increased premiums due to his skydiving hobby, that does not require us to pay death benefits in every instance. Please note policy provision 22.4 which specifically excludes coverage if the insured engaged in intentional self-harm.

We note that at the time of his death, the insured was skydiving without a reserve parachute, which is common within the sport. From this failure to maintain even the most basic safety guidelines of his sport, we presume that the policyholder took intentionally unsafe acts to hasten his own death. As such, we must deny coverage under provision 22.4.

Life insurance companies play this game all the time. They allow a policyholder to pay high premiums in exchange for the unfettered right to engage in dangerous hobbies, only to deny death benefits based on a claim of “intentional self-harm” if the insured dies during one of those events.

Fortunately for Rita, a friend suggested she contact an attorney specializing in the wrongful denial of death benefits. After reviewing her file, the attorney agreed to take Rita’s case against the life insurance company on a contingency basis. The also attorney agreed that the claim denial seemed bogus, and sued the life insurer on Rita’s behalf.

Ultimately, the court agreed that Rita was entitled to the full death benefits, plus interest. In its ruling, court noted that Tom had specifically asked for (and paid higher premiums for) a policy that would cover his participation in skydiving. It also noted that there was no external evidence of Tom’s intention to harm himself. These two factors persuaded the court to side for Rita.

We have dealt with scenarios like these over and over through the years. If you have had a claim denied based on similar circumstances, please give us a call. We’re here to help.

Hawaii denied life insurance claims are nothing new. Existing for many years, life insurance policies have been used to safeguard families and friends alike in case emergencies or accidents come unexpectedly. Unfortunately, denials of life insurance claims, as well as delays, are commonplace.
Our life insurance lawyers who live and work in Hawaii can help, whether you are in: Honolulu; East Honolulu; Pearl City; Hilo; Kailua; Waipahu; Kaneohe; or anywhere in the state of Hawaii, we will get you the benefits to which you are entitled.
Hawaii Life Insurance Law
Policies through work are governed under ERISA. . The primary regulating force here in Hawaii is Title 24 Hawaii Revised Statutes, and oversight is provided by the Hawaii Insurance Division.
Most Common Reasons for a Denied Life Insurance Claim in Hawaii
  • Number one is a misrepresentation on the application. This typically involves failing to disclose a medical condition. However, we can get over this hurdle the majority of the time.
  • A lapse of a life insurance policy is probably second most common. What happens is that the insured gets sick and misses a payment or two. These are tough, but often we can get these claims paid.
  • Probably third is the type of death exclusion. This could be a suicide or it could be a self-inflicted injury. Murder is another exclusion. Health again can fall under this exclusion. We often win suicide exclusions as we cite case law that the death was actually accidental.
  • A very common exclusion is the alcohol exclusion. The insured may have been killed in a car crash, but the autopsy revealed alcohol in the person’s system. We have many legal briefs to combat this exclusion.
  • Heroin and opiates or illegal drug exclusion is one of the biggest now. With the opioid crisis, there are tens of thousands of deaths.
  • Prescription drug overdose exclusion may involve an overdose of medicine or taken medicines that are contraindicated.
  • An ex-spouse being cut off from life insurance benefits is a big one. We actually have a half dozen ways to get over this hurdle.
  • Having a spouse not listed as a beneficiary is another reason for denial
  • Having a child not listed as a beneficiary is one too.
  • Having only a primary beneficiary who is deceased is another.
  • On an AD&D (accidental death and dismemberment) life insurance policy, a fall not being considered an accident is extremely common.
  • The insured’s age not being correct on the initial application is a reason for denial.
  • Having the wrong social security number listed is common.
  • An autoerotic asphyxiation exclusion is an easy one for us to beat.
  • An omission on the application is a big reason for denying a life insurance claim, but we have legal briefs to this effect.
  • Not providing the required documents to the insurance company after death is a reason.
  • Information which is argued to not be correct is one.
  • When there is a dispute between two or more beneficiaries, an interpleader may occur, and we always get these resolved quickly.
  • A beneficiary not named is a reason for not paying it out.
  • A life insurance policy may be transferred from one company to another by the employer which causes major problems.
Will your love of travel jeopardize your life insurance beneficiaries?
Learn how travel may impact life insurance claims
There are some people for whom travel is the ultimate indulgence. Maybe you’re one of them – jetting off to the south of France one week, then enjoying a safari excursion a month later. Now that global travel has become easier and easier, more people are taking every chance they can get to explore the world.
Of course, the risks involved in traveling are as vast as the number of different adventures you might choose. Planes, trains, and automobiles all crash from time to time. Foreign countries may have tainted water or airborne illnesses that American immune systems are not equipped to handle. Moreover, in many parts of the world, tourists are at great risk of robbery or other violent crimes.
Thus, it is not surprising that life insurance companies would prefer it if their policyholders stayed at home on the couch (with the occasional trip to the gym to maintain cardiovascular health). In fact, for years, many life insurance policies expressly prohibited policyholders from undergoing extensive travel. Fortunately, courts started to find such language unreasonably restrictive and many states now have laws on the books prohibiting these exclusions.
Nonetheless, life insurance companies still make travel-based claim denials all the time. After all, insurers don’t make money if they indiscriminately pay out every claim. Consequently, they will often make an initial denial of a death benefit – even if the reason for the denial is bogus – just to see if the beneficiary will walk away from the monies they’re entitled to.
As lawyers who exclusively deal with life insurance claims, we see improper travel-based denials all the time. In this article, we’ll explore the interplay between travel and life insurance. We’ll answer some of the questions we frequently receive after a life insurance claim has been denied for a reason relating to travel.
Are life insurance claims denied automatically if the policyholder dies in a foreign land?
Generally speaking, the answer is “No.” For most policies, payment of the death benefit is not conditioned on the location of the policyholder when she dies.
If you receive a claim denial based solely on the fact that the insured was outside the United States at her time of death, you need to call a lawyer specializing in life insurance claim denials right away. There’s a very good chance that denial can be overturned quickly.
My life insurance application asked several questions about my travel plans. What’s that about?
These application questions are relics of a time when life insurers were restricting policyholder travel. As noted, courts and lawmakers have largely put an end to that practice. Nonetheless, travel-related inquiries still crop up.
Life insurers justify such questions by saying they have a right to know whether a potential policyholder regularly travels to dangerous parts of the world. If that is the case, the insurer may be able to charge that person greater premiums, based on the theory that they have a higher probability of dying while abroad. Also, in some circumstances, life insurers can still include policy provisions that relieve them of paying death benefits if the insured dies in an exceptionally dangerous region.
What areas of the world do insurance companies consider exceptionally dangerous?
For the most part, a region of the world can be considered exceptionally dangerous if it is war-torn or is suffering from some sort of health epidemic. The United States Department of State always maintains a system for rating how dangerous it is to travel to every country in the world. They rate each country on a scale from Level 1 to Level 4 as follows:
• Level 1: Travelers should exercise normal travel precautions
• Level 2: Travelers should exercise increased caution
• Level 3: Travelers should reconsider their trip
• Level 4: Travelers are advised not to travel to this region
At the time this article was written, for example, Level 1 regions included Grenada, St. Lucia, and the Cayman Islands. Level 2 countries included Brazil, Italy, and Guatemala. Level 3 countries included Haiti, Honduras, and the Sudan. Level 4 countries included Iran, Iraq, and Afghanistan.
Based on these ratings, a life insurer may be able to restrict travel to Level 4 countries, and in some cases to Level 3 countries. If you are someone who travels to these sorts of regions, it is best to review your policy language and current State Department warnings before you book a trip.
My insurance application asked if I had any upcoming travel plans and I said “No.” It was true at the time. But now I want to go to Italy. Will they deny my claim if I die while I’m there?
We would not be surprised to see your life insurance company try to deny a claim on your policy if you died on a subsequent trip to Italy. We see them play this trick all the time. The life insurer acts like your “No” answer at the time of the application was a promise that you would never travel anywhere during the life of the policy.
Remember though, all you said was that you didn’t have any upcoming travel plans at the time of the application. You’re free to later change your mind and book a trip. Should you die on that trip, however, your insurer will almost certainly argue that your original answer was a “material misrepresentation.” They do this because in some instances, actual material misrepresentations in a life insurance application can serve as the basis for a later claim denial (e.g., if you tell the insurer you don’t smoke but are actually a 2-pack per day smoker).
Of course, your “No” answer in this instance was not any sort of misrepresentation and it is not a valid basis to deny your claim.
If you are a life insurance beneficiary who has had a claim denied on any of the above reasons, call us today. We’re here to help.