Life Insurance Lawyer Indiana

Whether you reside in: Bloomington; Fishers; Carmel; South Bend; Evansville; Fort Wayne or Indianapolis; our life insurance attorneys who live and work here in Indiana are here to help resolve your delayed or denied life insurance claim.

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Life insurance and the issue of illegality

Life insurers often misuse the provision excluding coverage for deaths resulting from illegal acts

Most people understand the basics of a life insurance policy. The policyholder pays premiums to the life insurance company. In exchange, the life insurer pays the policyholder’s beneficiary when the policyholder dies. Of course, insurance companies would go broke if they had to pay a death benefit every time one of their insureds passes away.

Consequently, life insurance companies have created policies that are full of exclusions. Exclusions absolve the insurer from paying a death benefit if the insured dies in certain ways that are defined within the policy. For example, a life insurance policy might contain exclusions for suicide, undisclosed medical conditions, or inherently dangerous activities.

One exclusion that life insurance companies like to invoke is the illegality exclusion. These provisions come in many forms, but they basically say that the insurance company is not obligated to pay a death benefit if the insured dies while engaging in an illegal act. One obvious example would be where the policyholder was shot to death while in the middle of trying to kill someone else.

Not all cases are so clear cut, however. This article explores one recent case out of Michigan where a life insurance company tried to improperly invoke an illegality provision in order to deny a claim. Fortunately, the beneficiaries retained an attorney who specializes in the wrongful denial of life insurance claims. As a consequence, the beneficiary was ultimately paid the death benefit his wife intended for him.

Illegal use of alcohol?

The case involved a 34 year-old woman named Erin. Erin had a life insurance policy that she received as a benefit of her employment with a large law firm. The policy called for a $2 million payout upon her death. Erin named her husband, Trent, as beneficiary under the policy.

It also contained several policy exclusions. Among them was an exclusion that relieved the life insurance company from its obligation to pay a death benefit if Erin died as the result of the “illegal use of alcohol.”

Sometime around Christmas in 2014, Erin went to a holiday party sponsored by her law firm. While there, she consumed several cocktails. This was unusual for Erin as she was not a regular drinker and certainly not a heavy drinker. Some of her colleagues noticed that she was getting a bit tipsy and implored her to take a cab home that evening.

Given that Erin’s judgment was impaired, she decided to drive herself home. Around 9:00 that night, she got behind the wheel of her BMW and headed for her condo, which was located some 35 minutes from the party. Fifteen minutes into her drive, Erin lost control of the car going around a curve. She wrapped her BMW around a telephone pole and forced two other cars off the road.

By the time paramedics arrived at the scene, Erin was already dead. The autopsy would later reveal that Erin was driving with a blood alcohol level of 0.11%. This was just slightly above the legal limit of 0.08%. Her family, friends, and colleagues were devasted to learn of the news. This was especially true for her husband, Trent.

A surprising life insurance claim denial

Shortly after Erin’s death, Trent made a claim for death benefits under Erin’s life insurance policy. Approximately one month after he submitted the claim, he received a unequivocal claim denial in the mail. The insurance adjuster who penned the letter was concise in her reasoning for the denial:

While we are sympathetic for your loss, we regret to inform you that we are unable to pay a policy benefit at this time. Your wife’s policy excluded coverage in the event her death resulted from the “illegal use of alcohol.” Given that Erin died while driving under the influence of alcohol (and with a blood alcohol level above the legal limit of 0.08% in Michigan), we have no choice but to deny your claim at this time.

Trent was devasted by this news. Shortly before Erin’s death, he had given up his career as a doctor to pursue his life-long dream of becoming an artist. Erin’s policy would have allowed him to continue pursuing that dream – which is something he and Erin very much wanted. A friend suggested Trent contact a lawyer specializing in the denial of life insurance claims.

There was no illegal use of alcohol

Fortunately, the attorney immediately spotted the flaw in the life insurance company’s reasoning. Erin didn’t die from the “illegal use of alcohol.” Given that she was well above the drinking age of 21 and drinking at a private indoor gathering, her consumption of alcohol was perfectly legal.

What Erin arguably died from was the illegal use of a motor vehicle while under the influence of alcohol. Erin’s life insurance policy, however, did not exclude coverage under those circumstances.

With Trent’s approval, the attorney took Erin’s life insurance company to court. Ultimately, Trent prevailed and was awarded the full policy benefit, with interest. The court completely agreed with Trent’s attorney that Erin had not engaged in the “illegal consumption of alcohol” and that, consequently, the life insurer’s invocation of that provision was wrongful.

Unfortunately, Trent’s experience is far from unusual. Even in instances where insurance companies know their claim denial reasoning is faulty, they will deny claims anyway. This is because they know that many grieving beneficiaries are simply too depressed to take on a fight against a large insurer.

As attorneys who specialize in the wrongful denial of life insurance claims, we see this behavior by insurance companies day in and day out. We’re not fooled and we’re not intimidated by their tactics. To the contrary, we’ve built a successful track record of contesting claim denials just like the one outlined in this article.

If you have recently had a life insurance claim denied on the same or similar bases, please don’t hesitate to contact us. We’re here to help.

Indiana 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 Indiana can help, whether you are in: Indianapolis; Fort Wayne; Evansville; South Bend; Carmel; Fishers; Bloomington; or anywhere in the state of Indiana, we will get you the benefits to which you are entitled.
Indiana Life Insurance Law
Policies through work are governed under ERISA. The primary regulating force here in Indiana is Title 27 of the Indiana Code, and oversight is provided by the Indiana Department of Insurance.
Most Common Reasons for a Denied Life Insurance Claim in Indiana
  • 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.
When life insurance claim denials make no sense
It probably happens more than you think
As lawyers who specialize in contesting denials of life insurance claims, we have seen justifications for claim denials that would make your head spin. Because we do this day in and day out, however, we know that even the most bizarre-seeming denials are serious business for the life insurance companies.
In fact, if you ever looked at the payroll records for a life insurance company, you might be surprised at what you see there. These companies hire more lawyers than you can possibly imagine. Some, of course, specialize in drafting long-winded and confusing policy language. Others are there to help claims adjusters come up with clever reasons to deny legitimate claims. And still others are focused solely on defending the company’s illicit claim denials in court.
Of course, for every life insurance company lawyer, there may be 10 claims adjusters. Claims adjusters are the people who review claims from policy beneficiaries and make initial decisions as to whether and to what extent death benefits will be paid out. You might assume these people are highly trained. Unfortunately, that is not always the case. Rather, they are provided with giant claims manuals that are filled with every reason under the sun why a claim should be denied.
To illustrate how bizarre some claim denial decisions can be, we’re going to present you with three different claim denial scenarios and let you guess which ones are true and which are completely fake. Ready? Here we go:
Claim denial scenario #1
The policyholder died in an automobile accident when a large boulder fell from a nearby cliff and crushed the man’s car. Police reports indicated that the deceased was driving safely and legally at the time of the accident. The autopsy report revealed that the deceased was not under the influence of any drugs or alcohol at the time of the incident. No foul play was suspected.
The insurance company denied to pay a death penalty to his beneficiaries because the autopsy revealed the man had Hepatitis C. True or false?
This claim denial scenario is true. In this case, the insurance company claimed that the man had not revealed his medical condition at the time he applied for life insurance. They claimed that if he had revealed his Hepatitis C, they never would have insured him in the first place. Accordingly, they claimed the entire policy was based on fraud and that they were under no obligation to make a policy payout.
Claim denial scenario #2
At the time of her death, the policyholder had been insured by the same life insurance company for five years. The policy stated that if the woman died of certain diseases such as cancer during the first two years of the policy (known as the “period of contestability”), the insurance company would not be obligated to pay a death benefit to her designated beneficiaries. The woman was completely healthy until the fourth year that the policy was in place. At that time, she was diagnosed with an aggressive form of cancer. She passed away one year later.
The insurance company denied the claim made by her beneficiaries because her death occurred during the period of contestability. True or false?
This claim denial scenario is true. Although the woman had been insured continuously for five years at the time of her death, the insurance company maintained her death occurred during the period of contestability. How could they claim this? Well, when the woman was first diagnosed with cancer and was undergoing aggressive and painful treatments, she missed making two premium payments. Her husband discovered this oversight when he received a notice of non-payment in the mail. He immediately brought her premium account back to current. Nonetheless, the insurance company claimed that by missing two months’ worth of payments, the woman had effectively allowed her policy to lapse and the period of contestability had to begin anew once her premiums were all caught up.
Claim denial scenario #3
The policyholder, a young father in his mid-30s, received a life insurance policy as part of his employee benefit package from his employer. When he filled out the application for the policy, he was 100% truthful about his past and current medical conditions, personal habits such as smoking and drinking, and potentially dangerous hobbies such as rock climbing. He also revealed that he had to regularly take a certain medication that was used to control his rheumatoid arthritis.
The man had been continuously covered by the policy for six years at the time of his death. The death came as a shock to everyone and thus an autopsy was performed to rule out foul play. The autopsy revealed that the man died of an overdose of his rheumatoid arthritis medication. Review of his medical history revealed that his doctor had increased the dosage of that medication due to the patient’s increased pain just three days before his death. The coroner officially ruled the death was due to an accidental overdose.
The insurance company denied the claim made by the man’s beneficiaries because the claims adjuster decided the death was a suicide. True or false?
This claim denial scenario is also true. In this case, the underlying life insurance policy contained a suicide exclusion that relieved the insurance company from paying a death benefit if the insured killed himself. Notwithstanding the coroner’s decision that the death was accidental, the insurance company decided of its own accord that the overdose was purposeful and denied the claim.
While each of the above examples may seem shocking, they are by no means unusual. In fact, we have handled cases similar to these more times than we can count and we have a very good track record of successfully overcoming these types of bogus denials.
Losing a loved one is hard enough. But when you’re then faced with an incomprehensible denial of a life insurance claim, things can seem like too much. Let us help. It’s what we’re here for.