Life Insurance Lawyer Massachusetts
Whether you reside in: Quincy; New Bedford; Brockton; Cambridge; Lowell; Springfield; Worcester or Boston; our life insurance attorneys who live and work here in Massachusetts are here to help resolve your delayed or denied life insurance claim.
When does your new life insurance policy kick in?
For your beneficiary’s sake, try not to die around the time a renewal policy is issued
If you’ve ever worked in the insurance industry, you know that insurance companies can be a bit ruthless. It’s not that the people who work for such companies are evil, it’s just that insurance companies have a very specific recipe for making money. Life insurance companies follow that recipe to a T. It goes something like this:
Sell as many insurance policies to as many people as you possibly can;
Collect premiums on those policies;
When the insured’s beneficiaries try to make a claim, deny the claim on any grounds you can think of;
Hope the beneficiaries never contest the claim denial.
As lawyers who specialize in the wrongful denial of life insurance claims, we see this pattern in practice all the time. In this article, we’ll explore one of the sneakiest grounds that life insurers use to avoid paying legitimate claims. The situation arises when a policyholder decides to renew a life insurance policy, increases coverage, and dies around the same time. In that situation, insurers often deny that the new policy has taken effect and refuse to pay the increased policy limit. Consider the following scenario.
A loyal customer increases coverage
A gentleman in his mid-60s named Jeff had worked for the same waste management company for nearly 30 years. For the past 20 years, he had taken advantage of a company sponsored life insurance plan.
Pursuant to that plan, Jeff obtained a life insurance policy and named his wife Jean as the sole beneficiary. Jeff’s employer routinely paid 80% of his premiums and Jeff paid 20%. Neither Jeff nor his employer ever made a late premium payment.
Each year that Jeff was employed, the policy had to be renewed. As part of the renewal process, Jeff was required to truthfully fill out a health questionnaire and take a brief physical examination conducted by an insurance company employee. During each annual renewal period, Jeff was given the option of changing his coverage. He could increase coverage so long as he remained in good health and agreed to pay additional premiums.
During the 20 years that Jeff had life insurance policies from this particular life insurer, he only changed his coverage three times. In 1994, he increased his policy payout from $100,000 to $200,000. In 2004, he increased coverage to $300,000. In 2014, he increased his coverage to $400,000.
Each time Jeff requested a change, the insurer reviewed his health information and offered to issue a renewal policy with the increased coverage. At that time, the insurer would also inform Jeff of his new premium. If he agreed to pay that new amount, all he had to do was check a box on a form that said “I agree to pay the new premium” and mail it to the insurer. The insurer would then mail Jeff a copy of his renewal policy along with a premium statement requiring him to pay that new and increased premium amount within 45 days of receiving the new policy.
Jeff paid the new premium like clockwork in 1994 and 2004. In 2014, however, Jeff died in a car accident just days before he received the increased renewal policy in the mail. Thus, at the time of his death, he had not yet had paid the premium on that new policy.
The insurance company refused to honor the new policy
Approximately one month after Jeff’s passing, Jean gathered all the information necessary to make a claim against Jeff’s life insurance policy and submitted her claim to the insurer. Given that Jeff’s new policy had arrived in the mail just a few days after his death, Jean was able to review the policy thoroughly and she was confident the death benefit would be $400,000.
Much to Jean’s surprise, however, she received a claim denial letter in the mail. According to the life insurance company, Jeff’s policy from the year prior to his death had expired. The adjuster also stated that because Jeff had not yet paid a premium on the new, increased policy, that policy was not effective at the time of Jeff died. Thus, according to the insurance company, it had no obligation to pay Jean’s claim.
Jean was stunned. They had been paying premiums to that company for 20 years. Not one to take “no” for an answer, Jean immediately began searching for a lawyer who specializes in the wrongful denial of life insurance claims. Ultimately, it was a decision that earned her nearly a half a million dollars.
The lawyer recognized that the insurance company was playing games and ignoring established law on this issue. Specifically, a long-established principle known as the “mailbox rule” deemed Jeff’s acceptance of the new policy and its higher premium as effective the moment he put the company’s form in the mail.
The lawyer also knew that it didn’t matter one bit that Jeff hadn’t made a premium payment on the new policy at the time he died. The company’s regular course of business with Jeff was to give him 45 days from issuance of the new policy to make that payment. The fact that he died before the premium could be paid did not render the policy ineffective.
The lawyer sued the insurance company on Jean’s behalf. The court ruled entirely in Jean’s favor and awarded her the full $400,000 death benefit, with interest, bringing her full recovery to just under $500,000.
As a law firm that specializes in the wrongful denial of life insurance claims, we witness insurance companies playing these games all the time. We’re not intimidated by them and we don’t let them get away with it. If you or a loved one has recently received a life insurance claim denial in the mail, please call to discuss the situation. We’re here to help and we may be able to get you the recovery you deserve.
- 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.