Life Insurance Lawyer Montana

Whether you reside in: Bozeman; Great Falls; Missoula or Billings; our life insurance attorneys who live and work here in Montana are here to help resolve your delayed or denied life insurance claim.

COVID-19 UPDATE: Our Montana life insurance attorneys are now handling numerous COVID-19 Coronavirus denied life insurance claims.

What happens if you get some details wrong in your life insurance application?

Like most types of insurance, life insurance is a game of numbers. In order for life insurance companies to stay profitable, they have to factor in several variables when setting up a policyholder’s available death benefit, as well as her annual premium amount. These variables include things like age, health, lifestyle, and hobbies.

Typically, life insurance companies gather this information as part of the policy application process. First, they may ask the applicant to undergo a brief physical examination. For example, they might test things like blood pressure, pulse rate, and body measurements. They might also take a blood sample to test for certain diseases, as well as the presence of nicotine or any illicit substances.

Almost without exception, the life insurance company also asks the applicant to fill out a lengthy questionnaire. It asks questions about the person’s health history, exercise habits, and diet. It may also ask questions to determine whether the applicant regularly engages in any “inherently dangerous activities.” These include things like SCUBA diving, skydiving, or motorcycle racing.

All of these factors are then analyzed so the insurer can decide: (a) whether to issue the applicant a life insurance policy at all; and (b) if so, what the annual premium should be. Not surprisingly, people who suffer from illnesses, are obese, smoke, or engage in dangerous sports activities will pay higher premiums than others. This is because the life insurance companies have determined that, statistically, these people are likely to die sooner than people with healthier and less risky lifestyles.

Consequently, life insurers take the application process very seriously. In fact, if an applicant lies in her life insurance application and later dies during the policy term, there are circumstances under which the life insurer can refuse to pay her beneficiaries the death payout she intended for them – even if the policyholder dies of a cause wholly unrelated to the lie in her application. But what if the applicant made a simple mistake or gets some details wrong in her policy application? This article explores one such case.

Surf’s up

The case at hand involved a woman in her late thirties named Lelani. Lelani grew up in Hawaii and started surfing with her father at the age of two. For Lelani, surfing wasn’t so much a sport as it was a way of life. Indeed, she was such a natural at it that by the age of 15, she was already competing in the pro circuit with other surfers around the world.

As Lelani approached adulthood, however, she decided to give up professional surfing to pursue a career in the law. She graduated at the top of her law school class, and accepted a job with a prestigious law firm in Los Angeles, where she knew she could continue to surf regularly. Right off the bat, the law firm provided a six-figure salary and a generous benefits package, including life insurance.

Many years later, Lelani was made a partner in her firm. Among other things, that made her eligible for a life insurance policy with a much higher death payout. In order to qualify for that policy, however, she had to undergo a rigorous application process that included a physical examination and a detailed health questionnaire.

Among the questions asked by the insurer was: “Do you engage in any of the following activities more than three times per year?” The questionnaire then listed several different sports, including these two choices: “Surfing” and “Extreme Surfing.” Lelani, who was always very humble about her surfing abilities, indicated that she was a surfer, but denied being an “extreme” surfer.

In fact, for years Lelani had spent each of her vacations traveling around the globe chasing the biggest waves she could find. To Lelani, there was truly nothing “extreme” about this. Surfing was simply a core part of her being.

The insurance company accepted Lelani’s application and issued her a $4 million policy. She paid slightly higher premiums based on the fact that she surfed regularly but nowhere near the premiums she would have paid had she indicated she was an “extreme surfer.”

A tragic accident and a claim denied

Just under two years after the issuance of the policy, Lelani was killed in a freak surfing accident off the coast of Hawaii. Her husband, who was the sole beneficiary under her life insurance policy, filed a claim for the $4 million payout.

Because her policy was so new, the insurance company undertook an investigation into Lelani’s death, as well as the circumstances of her life before the accident. Insurers often do this hoping they’ll find inconsistencies between the policyholder’s application answers and their actual lifestyle. If they do, they almost routinely deny any claim against the policy.

Such was the case with Lelani. Her insurer scoured her social media pages and discovered that for years she had been engaging in what the company considered “extreme surfing.” They denied the claim on that basis.

This didn’t sit right with Lelani’s husband. He contacted a lawyer specializing in the wrongful denial of life insurance claims. They discussed the circumstances of Lelani’s life and death. The lawyer decided the claim denial was worth contesting as several witnesses were available to testify that Lelani – always humble – would have never described herself as an extreme surfer.

After much negotiation with the insurer, the lawyer was able to structure the following deal: the insurance company paid the death benefit to Lelani’s husband, minus the difference between (a) what Lelani had paid in premiums prior to her death; and (b) what she would have paid had she stated on her application that she was an extreme surfer. All in all, a fair result for Lelani’s husband and the insurer.

As attorneys who specialize in life insurance claim denials, we successfully contest claim denials like this all the time. If you have received a claim denial that seems questionable, call us today. We’ll evaluate your case and help you get the payout you truly deserve. Call today.

Montana 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 Montana can help, whether you are in: Billings; Missoula; Great Falls; Bozeman; or anywhere in the state of Montana, we will get you the benefits to which you are entitled.
Montana Life Insurance Law
Policies through work are governed under ERISA. The primary regulating force here in Montana is Title 33 of the Montana Code, and oversight is provided by the Office of the Commissioner of Securities and Insurance.
Most Common Reasons for a Denied Life Insurance Claim in Montana
  • 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.
Paying life insurance premiums through a broker – a cautionary tale
It is critical to make sure your premiums are being paid
There may be no greater pain in life than the death of a child. Regardless of the child’s age at death, the grief can be literally unbearable. Imagine how that pain might be compounded if, after your child passed away, you learned that a life insurance policy you intended to obtain on the child’s life was never actually purchased by your insurance broker. That is exactly the scenario one Idaho couple faced and, much to their dismay, there was nothing they could do about it.
In fact, this particular couple took their case all the way to the Idaho Supreme Court – and still faced the unfortunate reality that their deceased son was not covered by life insurance. As lawyers who specialize in the denial of life insurance claims, we know that oftentimes, an insurance company’s claim denial is completely bogus. In fact, we successfully contest such denials all the time.
This article explores the above-referenced case in depth, as it presents one of the rare instances where a life insurance claim denial was litigated all the way to the state’s highest court, and still found to be valid. In exploring this case, we by no means intend to suggest that contesting life insurance claim denials is a futile exercise. To the contrary, our sole career focus is making sure beneficiaries get paid despite inappropriate denials. Rather, this case is examined as a cautionary tale. The moral of the story is this – always make sure your policy premiums have been paid.
The Smith family
The Smiths were a young family. The husband/father was Ken Smith. Ken had long maintained all of his insurance policies through the same broker – Paul Davis. For many years, Ken had even purchased a life insurance policy on his own life through Davis. When Ken and his wife Nancy had twins, however, Ken decided he should also purchase life insurance policies covering the whole family. Not surprisingly, Ken turned to Davis to purchase the additional coverage.
As they had done in the past, Ken and Davis set up a checking account specifically for the purpose of making Ken’s insurance premium payments. The new account, which was called the “Life Insurance Premium Account” was maintained by Davis, though Ken was named as an additional signatory. At the time Ken applied for the policies on his wife and the twins, Ken also wrote out a couple of checks to be deposited in the Life Insurance Premium Account. Ken presumed that Davis would faithfully make any needed premium payments from those monies as he had never skipped premium payments on any of Ken’s other policies. In fact, Ken never even thought to check the balance of the joint account to make sure his checks had been deposited and that the money had gone out to the insurer.
The unthinkable happened
A few months later, the unthinkable happened to the Smith family. One of the young twins, Tyler, died in a sudden accident. The couple understandably struggled to deal with their grief, finding it hard to even get out of bed some days. Nonetheless, they eventually had to get back to the business of living and, as part of that, had to take care of some of the administrative tasks that arise when a person dies.
One of those tasks, of course, was to make a claim for death benefits under the life insurance policy Ken obtained for Tyler. When he contacted the life insurance company, however, Ken was in for the next greatest shock of his life.
The life insurance company informed Ken that while they had received the applications for policies on Nancy and the twins, they had never received any premium payments. Thus, they said, there was no policy in place and they had no choice but to deny Ken’s claim.
Unable to deal with his own shock, confusion, and grief, Ken contacted the Idaho Department of Insurance and asked them to investigate the matter. The Department quickly determined that Davis had simply never made any premium payments out of the Life Insurance Premium Account. He hadn’t gotten around to it and, as Davis would later explain, no one expects an infant to die in the first few months of life.
Ken sued Davis and the life insurance company under many theories, including breach of contract. Ken eventually settled his claim against Davis for an undisclosed sum. As noted earlier, the Smith family then took their case against the life insurance company all the way to the Supreme Court. Unfortunately, the court, while sympathetic to the loss suffered by the young family, had to rule in favor of the life insurer. The court reasoned that because there had never been any premium payment on Tyler’s policy, no contract for insurance had ever been entered. Without a contract (aka policy) in place, the insurance company simply had no obligation to pay a death benefit.
Lesson learned – pay your premiums
As heart-breaking as the Smith family case is to read, the outcome was technically correct from a legal standpoint. A policy typically does not become valid until the policyholder starts making premium payments. As this case illustrates, that responsibility should not be delegated to someone else. The reality is, however, many people make their premium payments through their trusted insurance brokers. It happens all the time. So, how can policyholders make sure their premiums actually reach the insurance company?
Ask for regular notifications of payment from your broker – whether they come by way of email, text, or regular mail. Visit your account page on your life insurer’s website. If payments haven’t been made, contact your broker right away.
Paying premiums doesn’t insure that a claim for death benefits will be paid, however. Insurance companies come up with illegitimate denial justifications all the time. That’s where we come in. If you’re facing an improper denial of a life insurance claim, call us today. We’re here to help.