Life Insurance Lawyer Kansas
Whether you reside in: Shawnee; Lawrence; Topeka; Olathe; Kansas City; Overland Park or Wichita; our life insurance attorneys who live and work here in Kansas are here to help resolve your delayed or denied life insurance claim.
COVID-19 UPDATE: Our Kansas life insurance attorneys are now handling numerous COVID-19 Coronavirus denied life insurance claims.
When is a life insurance premium paid “on time”?
A recent case provides guidance on when premium payments are deemed to be made
Life insurance is a very important estate planning tool for many Americans. Essentially, a life insurance policy can mean the difference between financial security and hopelessness when a trusted breadwinner passes away unexpectedly. As such, it is critical for most families to keep their life insurance policies in good standing.
There are a very few reasons why a life insurance company can cancel a valid policy. One of those reasons, of course, is the non-payment of policy premiums. Even in those instances, however, the life insurance company has to give its policyholder ample notice of nonpayment and the opportunity to reinstate the policy in the event payments are so late that the policy lapses.
Unfortunately, it is in the life insurance company’s best interest if the policy does lapse during the policy term. It is not hard to understand why. So long as the policyholder paid premiums for some time, those premiums equate to pure profit if the policy lapses and the insurance company is relieved from ever having to make a policy payout.
Given these circumstances, it is not surprising when life insurers actively try to avoid policy reinstatement efforts. Such was the case with one recent couple on the East Coast. This article explores their plight and also discusses why it is so important to have the right professionals on your side when things go awry with a life insurance policy.
Late payments due to life circumstances
The couple involved in the case at hand were named Harry and Linda. The two had been married for 35 years and were very proactive about estate planning. This was especially true since Linda had spent her entire adult life as a homemaker. If Harry were to die before Linda, he wanted to make sure she had sufficient financial security.
One of the couple’s estate planning strategies was to maintain a large life insurance policy on Harry’s life. For over a decade, the couple was diligent about paying the monthly premiums to keep Harry’s policy active.
In the summer of 2012, however, Harry got suddenly and unexpectedly ill. Doctors weren’t sure what was wrong, but since Harry was unconscious most of the time, they kept him in the hospital for weeks on end. Not surprisingly, Linda was right by his side.
Even after Harry was released from the hospital, he needed months of intense caretaking. Due to what doctors came to believe was some sort of brain aneurysm, Harry had to re-learn how to walk, talk, feed himself, and take care of his most basic needs. Understandably, Linda struggled to keep up with the daily tasks necessary to keep Harry alive.
She also struggled to keep their household together. For months on end, Linda never got around to opening the couple’s mail, even though she kept telling herself she’d get to it. In fact, mail piled up for some six months as she fought to keep Harry alive.
The shock of a cancellation notice
Finally, Harry’s condition deteriorated to the point that he was put into hospice care. While this was a tough milestone for Linda, the additional care Harry was receiving allowed her to try to catch up on household tasks that had been long neglected.
One of the first things Linda did was begin opening her large pile of mail. While she suspected she would find some overdue bill notices, she had no idea what was going on with Harry’s life insurance policy. Essentially, the company had given notice of late payment, given notice of impending cancellation, and finally terminated Harry’s policy. The termination notice, however, gave Harry the chance to reinstate the policy so long as he did so by December 30.
When Linda read that notice, it was December 29. She quickly figured out the full amount of past-due premiums, wrote a check for that amount, filled out a form indicating Harry’s desire to reinstate coverage, and dropped the full packet off at the nearest post office. In that moment, Linda felt lucky she found the cancellation notice in time to save the policy.
Was the policy cancelled?
Just two weeks after Linda mailed the reinstatement paperwork, Harry passed away. Linda quickly submitted a claim for death benefits under Harry’s policy. Much to Linda’s surprise, the claim was denied. The claim denial letter read as follows:
Although we acknowledge that you attempted to reinstate Harry’s policy prior to his death, you did not do so in a timely manner and the policy was never reinstated. The deadline for reinstatement was December 30 and our office did not receive your paperwork until January 3.
Something about this correspondence did not sit right with Linda. She contacted an attorney specializing in the wrongful denial of life insurance claims and read him the letter. The attorney immediately saw the flaw in the insurer’s reasoning. According to state law, it didn’t matter when the insurance company received the reinstatement paperwork. What matters was when the paperwork was deposited in the mail (i.e., postmarked).
In this case, of course, the paperwork was postmarked on December 29 – one full day before the reinstatement cutoff. Linda’s attorney sent a stern letter to Harry’s life insurance company with full citations to relevant law. Within three weeks, the insurer reversed its claim denial decision and issued Linda a check for the full policy amount.
This case is important because it illustrates that life insurers are willing to ignore basic tenants of law if they think they can avoid paying valid benefits. If Linda hadn’t obtained a specialized attorney, she may have walked away from a large sum of money her husband intended for her.
As attorneys who specialize in contesting life insurance claim denials, we witness scenarios like this all the time and we know how to overcome them. If you have received a recent claim denial that you want to discuss, give us a call. We’re here to help.
- 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.