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How does an interpleader action work with respect to a life insurance beneficiary dispute?
An interpleader action is a legal process that can be used to resolve a beneficiary dispute over a life insurance policy. Here's how it typically works:
  1. The insurance company receives competing claims from two or more parties claiming to be the rightful beneficiary of a life insurance policy.

  2. The insurance company is unsure which party is entitled to the policy proceeds, and does not want to risk paying the wrong party and facing liability.

  3. The insurance company files an interpleader action in court, and deposits the policy proceeds with the court.

  4. The court issues an order requiring all parties to the dispute to appear and state their claim to the policy proceeds.

  5. Each party presents their case to the court, providing evidence and arguments in support of their claim.

  6. The court then decides which party is entitled to the policy proceeds, based on the evidence and arguments presented.

  7. The insurance company is then relieved of any liability for paying the wrong party, as they have followed the court's decision and paid the rightful beneficiary.

Interpleader actions can be an effective way to resolve beneficiary disputes over a life insurance policy, as they allow the court to determine the rightful beneficiary based on the evidence presented. This can help to avoid costly and time-consuming litigation between the parties, and ensure that the policy proceeds are distributed to the correct beneficiary in a timely manner.

What countries have led to the denial of life insurance claims of US Citizens who died overseas?

  1. Afghanistan - Level 4: Do Not Travel
  2. Central African Republic - Level 4: Do Not Travel
  3. Iran - Level 4: Do Not Travel
  4. Iraq - Level 4: Do Not Travel
  5. Libya - Level 4: Do Not Travel
  6. Mali - Level 4: Do Not Travel
  7. North Korea - Level 4: Do Not Travel
  8. Somalia - Level 4: Do Not Travel
  9. South Sudan - Level 4: Do Not Travel
  10. Syria - Level 4: Do Not Travel
  11. Venezuela - Level 4: Do Not Travel (some areas)
  12. Yemen - Level 4: Do Not Travel
  13. Haiti - Level 4: Do Not Travel (some areas)
  14. Nigeria - Level 3: Reconsider Travel (some areas)
  15. Pakistan - Level 3: Reconsider Travel (some areas)
  16. Russia - Level 3: Reconsider Travel (some areas)
  17. Egypt - Level 3: Reconsider Travel (some areas)
  18. Philippines - Level 3: Reconsider Travel (some areas)
  19. Honduras - Level 3: Reconsider Travel (some areas)
  20. Mexico - Level 3: Reconsider Travel (some areas)

New York Denied Life Insurance Claims Recently Settled

  • Mass shooting New York denied life insurance claim $306,000.00
  • Globe self-inflicted injury or suicide exclusion $218,100.00
  • Transamerica illegal activity felony exclusion $379,000.00
  • AIG interpleader lawsuit beneficiaries won $436,000.00
  • ERISA insufficient documents to support claim $147,000.00
  • New York denied life insurance claim $2,589,300.00
  • SGLI invalid beneficiary issue resolved $400,000.00
  • American Fidelity interpleader lawsuit $308,000.00
  • State Farm spouse and ex-spouse dispute $175,000.00
  • Denied life insurance claim New York $1,264,000.00
  • Stonebridge medical records reveal omission $250,000.00
  • Citizens Life autoerotic asphyxiation death $300,000.00
  • Mass Mutual bad faith denial of claim won $425,000.00
  • Reliance Standard beneficiary dispute $101,000.00
  • Denied AD&D policy New York $1,000,000.00
  • Bankers Life prescription drug exclusion $214,000.00
  • Genworth ambiguous language of policy $126,000.00
  • Principal suspicious circumstances resolved $292,000.00
  • New York divorce and life insurance $3,019,200.00
  • Foresters misstatement of age on application $127,000.00
  • The Hartford foreign death problem settled $389,000.00
  • Prudential accidental death and dismemberment $415,700.00

Who Tracks Down Life Insurance Beneficiaries?

People frequently buy life insurance plans and then neglect to make the required payments. Some people may pass away before ever informing their loved ones about the policy. The insurance coverage consequently becomes unclaimed property.

Any insurance policy that has been inactive for a specific amount of time—typically three to five years—is considered unclaimed property. The insured, even though they have passed away, are still regarded as the owner of the unclaimed funds.

According to state legislation, unclaimed life insurance policies are given to the state government for the purpose of locating the beneficiaries. When this occurs, the state where the insurance was purchased then owns the unclaimed coverage. Until the rightful owner steps forward to claim the policy, the state will claim ownership of it.

Who Is Responsible for Identifying Beneficiaries?

Finding the beneficiaries of unclaimed life insurance policies is often the insurance company's obligation. Typically, the insurance provider will begin by looking through its own files to find the insured's next of kin.

The state unclaimed property office will be contacted by the insurance company if no living relatives can be found. All unclaimed life insurance policies will be listed in the database of the state office for unclaimed property.

The beneficiaries are informed that they are eligible for the unclaimed insurance by the insurance provider or the state, as appropriate. No matter where they are, they start by trying to contact immediate family members before moving on to distant relatives.

How to Claim an Unclaimed Coverage?

You can check if you are the beneficiary of an unclaimed life insurance policy by taking the following steps:

  1. Consult the insurer: Making contact with the insurance provider who issued the coverage is the first step. The name and birthdate of the insured must be given to them. The insurance provider will then check their files to determine whether there are any unclaimed policies.
  2. Search the state database of unclaimed property: If the insurance provider is unable to provide any information, you may then do a search of the state's database of unclaimed property. All of the state's unclaimed life insurance policies will be listed in this database. The National Association of Unclaimed Property Administrators is where you may locate this list.
  3. Contact the state office to inquire about unclaimed property: If you find a life insurance policy that is yours, you must contact the state's unclaimed property office to begin the claims process.
  4. You can check the NAIC if you are the beneficiary but are unclear about the life insurance company.

A claim application and identity documents must be submitted to the state division of unclaimed property. You will be qualified to collect the benefits of the unclaimed insurance once the claim has been resolved.

It is a stark reality of modern life that many people turn to alcohol and other substances in order to dull the stressors of daily living. For some people, substance use quickly turns into substance abuse. In truth, however, very few people actually seek medical treatment for drug and alcohol abuse.

In part, this resistance to seeking help may be due to embarrassment. People don’t like to admit that they have problems. Indeed, while some people do seek the help of a medical professional for substance abuse, they may still hide the problem in other areas of their lives. As one couple in Montana found out recently, this sort of hiding can lead to a whole host of other problems.

Our firm specializes in the wrongful denial of life insurance claims. Thus, this article explores the potential consequences that can arise when a policyholder (or the applicant for a policy) fails to disclose alcoholism or other substance abuse to his or her life insurance company. While the case we’ll discuss ended up favorably for the policyholder and his beneficiary, this issue is getting more and more attention from life insurers and the courts.

A “forgotten” detail in a policy application

A man named Joel and his wife Sara had a home loan with a local bank in Montana. When the couple sought to increase the amount of that loan, the bank required that each of them obtain a life insurance policy that would cover the full amount of the loan if one of them were to die before the loan was paid off.

Joel and Sara agreed to obtain the required life insurance policy. In fact, they completed the insurance application inside their local bank branch with a bank officer verbally asking them questions about their health and other factors that might impact their insurability. Truthfully, the application was quite short compared with other life insurance applications. The bank officer asked each individual two key questions:

Have you been hospitalized or sought the advice of a physician for any medical condition during the last three years?

Have you ever been diagnosed with or treated for heart disease, lung disease, kidney disorders, high blood pressure, cancer, tumors, or diabetes?

Both Joel and Sara answered “no” to each question. If either had given a “yes” answer, the application would have required the banker to elicit additional health information. Given the couple’s firm denials, however, the banker simply asked each individual to sign a statement swearing that the answers they had given were truthful to the best of their knowledge.

A few weeks later, the life insurance company issued $100,000 policies on both Joel and Sara. Each policy contained a “period of contestability” of two years’ duration. Essentially, that meant that if either person died within two years of the policy issuance, the insurance company had a right to dig into their past medical records to determine whether they had lied in their policy application. At that time, no one believed that policy language would ever become an issue for the couple.

An unfortunate ending

Just over a year and a half after Joel and Sara received the life insurance policies, Joel died as the result of a self-inflicted gunshot wound to the head. A police investigation and autopsy led authorities to believe that Joel had shot himself accidentally while he was highly intoxicated. Indeed, Sara admitted to police that Joel had been drinking beer for approximately 10 hours before the tragic accident occurred.

Notwithstanding her devastation, Sara gathered all the paperwork necessary to submit a claim to the couple’s life insurance company. The full claim submission included the following:

Police reports, which included Sara’s witness statement

The autopsy report, which revealed that Joel was suffering from an enlarged liver, and

The coroner’s report, which listed Joel’s official cause of death as “accidental self-inflicted gunshot wound due to extreme alcohol intoxication.”

Given that Joel’s death occurred during the period of contestability, the life insurance company decided to do a full investigation into Joel’s medical history before they would issue a decision on Sara’s claim. During that investigation, the insurer discovered that one year prior to the date of the couple’s life insurance application, Joel had sought medical treatment for alcoholism.

In light of this information, the life insurer denied Sara’s claim for benefits. The company contended that: (a) Joel had lied in the insurance application when he said he had not sought the advice of a physician for “any medical condition” during the three years prior to the application; and (b) had the insurance company known the truth about Joel’s alcoholism, it never would have issued him a life insurance policy.

Although the reasoning for the denial made sense to Sara, she still sought the advice of an attorney who specialized in the wrongful denial of life insurance claims. It’s a good thing she did. The attorney took the life insurance company to court and made two key arguments: (1) that Joel didn’t consider his alcoholism to be a “medical condition” that had to be disclosed; and (2) that if the insurance company found alcoholism to be a sufficient reason to deny coverage, it would have listed it among the conditions in the second question on the application.

Based on those arguments, the court sided with Sara and awarded her the $100,000 death benefit, plus interest, which she then used to pay off the loan to the bank. Sara remarked at the close of the case that she had no idea how she would have ever paid off the loan without the court’s ruling.

As lawyers who specialize in the wrongful denial of life insurance claims, we know that Sara’s case is not unusual. If you are facing a claim denial that gives you the least bit of pause, call us today. We’ll assess your case and do our best to get you the death payout your loved one intended for you.

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Disability before death

Robert was a 52 year-old man who had worked as a longshoreman for decades. Part of the reason he stuck with the job is that it offered great benefits, including a sizeable group life insurance policy. While Robert was responsible for the premium payments, they were much lower than normal given the size of his employer’s insurance group. Also, he never even had to think about his coverage because the premiums were automatically deducted from his paycheck each month.

Unfortunately, his daily work was hard on the body and, as Robert got older, he found that he was struggling to keep up. On one particularly rainy day, Robert slipped while securing the lines that tether large ships to the port. As he fell, he heard something snap in his back. He immediately fell to his knees in extreme pain. Imaging tests would later reveal that Robert had ruptured at least three discs in his lower back that afternoon. He had no choice but to go out on disability, undergo an extensive back surgery, and take a great deal of time off in order to recover.

Some time after the incident, Robert was ambulatory enough to have a meeting with his employer’s Human Resources (HR) department. His wife Joan, who was the sole beneficiary under his life insurance policy, accompanied him. The HR manager went through several things with him that day, including important information about Robert’s life insurance policy.

Specifically, she informed Robert that even though he was going to be out on disability, he needn’t worry about his life insurance premiums. They would be taken care of through something Joan recalled being referred to as “waiver forms” that the HR department was going to submit to the life insurance company. According to the HR manager, these waiver forms would relieve Robert from the monthly premium obligation. This was a relief to Robert and Joan, as they were already on a tight budget.

Death and claim denial

Sadly, Robert died of a heart attack just six months after his accident. Although his back had been recovering, he had not yet returned to work and remained on disability at the time he died. Joan, recalling the post-incident meeting with the HR manager, was grateful she could still file a claim with Robert’s life insurance company.

Imagine her surprise when just a few weeks later, she received a claim denial letter in the mail. According to the letter, Robert’s policy had lapsed three months after his accident. The insurer claimed that the policy lapsed due to non-payment. This greatly confused Joan as she clearly remembered the HR manager saying Robert didn’t need to pay any premiums while he was out on disability. Moreover, Joan opened the couple’s mail every single day and she never recalled receiving any notices of nonpayment or cancellation notices.

Fortunately, a close friend was tending to Joan at the time. She suggested Joan call an attorney specializing in the wrongful denial of life insurance claims. Joan called that very afternoon and spoke to an attorney. After explaining the situation for about 15 minutes, the attorney was able to give Joan some measure of comfort.

He had seen this precise scenario several times before. All too often, he explained, HR personnel knew enough to mention the disability/waiver of premium forms but then became too busy to actually submit the forms once the disabled employee left their office.

The attorney contacted Robert’s employer the next day. Sure enough, the HR department had completely dropped the ball on submitting the disability/waiver of premium forms. Joan’s attorney next arranged a conference call between the in-house lawyer for Robert’s employer and the in-house attorney for the life insurance company. The three agreed on one thing – the policy lapse occurred through no fault of Robert’s.

Consequently, the insurer agreed to pay Joan the full policy benefit. Robert’s employer agreed to pay the life insurance company the back premiums that should have been covered by the disability/waiver of premium process. In the end, everyone got exactly what they were entitled to get, thanks to the specialized knowledge and expertise that Joan’s lawyer possessed.

If you have had a life insurance claim denied based on an employer’s failure to submit disability/waiver forms to an insurer (or for any other reason), please call us today. Absent any extenuating circumstances, there’s a good chance we can get you the policy payout your loved on intended for you.

Modern technology is truly amazing. Whereas 30 years ago, DNA was an obscure scientific topic that was barely being taught at universities, today people can purchase DNA testing kits from the internet that they can complete right from their homes. Those tests can tell a person everything from their racial heritage to their likelihood of contracting various diseases.

And, because of that latter point, consumers need to be very careful about when they purchase DNA test kits – especially if they are planning to obtain life insurance in the future. This is because in recent years, life insurance companies have become keenly aware of the power of genetic testing.

To understand this point, let’s first take a look at how life insurance companies operate and, perhaps more importantly, how they make money. Next, we’ll explore how life insurers are already starting to use DNA testing to maximize profits and deny claims.

How life insurance companies make money

Like other for-profit businesses, life insurance companies are in business to generate profits for their shareholders. The way they operate is simple: they collect premiums from policyholders and, in exchange, pay a death benefit to beneficiaries when a policyholder dies. To consistently generate profits, they need to collect more premiums than they pay out in death benefits.

There are a few ways life insurers can accomplish this goal. Ultimately, each method revolves around the health and habits of policyholders. If, for example, someone applies for a policy but is in poor health or subject to health risks, the insurance company – to the extent they would insure that person at all – would charge extremely high premiums in exchange for a low death payout.

Another way that life insurance companies keep profits high is to deny valid claims and hope that beneficiaries don’t contest their decisions. As attorneys who specialize in the denial of life insurance claims, we see it all the time. And one new trend that we’re predicting is that life insurers will use genetic tests to justify claim denials.

How genetic testing impacts life insurance

Most times, when a person seeks to obtain life insurance, they have to go through a thorough investigative process with the insurer. As noted above, the life insurer will look at the applicant’s propensity for health and set premiums accordingly. One way they do that is through lengthy application questionnaires.

In recent years, those questionnaires have included questions regarding any genetic testing the applicant has undergone. For example, if the applicant has taken a DNA test and it revealed a risk for a genetic disease, that person would be less likely to receive a policy – and way more likely to pay high premiums if they could get one at all.

To illustrate, we know life insurers are way less likely to issue a policy if an applicant has taken a DNA test that revealed the presence of the BRCA gene – a gene that is linked to breast and ovarian cancer in women. From a pure profit-driven standpoint, this makes sense. The insurance company is protecting its revenue stream by refusing to issue policies to people with a genetic likelihood of contracting a potentially fatal disease. Neither the courts or the legislature have taken a stance on this yet.

As we will see below, however, insurance companies may begin utilizing DNA tests in ways that may be more questionable.

The post-policy genetic test

One scenario that industry watchers are concerned with is the post-policy genetic test. Let’s say, for example, that a person applied for life insurance before undergoing any genetic testing. During the application process, she answered all questions truthfully and hid nothing from the insurer.

After the policy was issued, however, the insured orders a home DNA test online and learns that she has a genetic predisposition for breast cancer. Does she have a duty to inform her insurance company of those results? Currently, the answer is no. But if she were to die and the insurance company later learned of her genetic disposition, it may try to deny paying death benefits to her beneficiaries.

Material misrepresentations

Let’s consider another scenario. What if a life insurance applicant orders a test before applying for life insurance but never read the results when she received them by email? In her application for insurance, she honestly states that she is unaware of any genetic predisposition to disease. Unfortunately, there is an unopened email in her computer alerting her to the presence of the BRCA gene.

If she is issued a policy and later dies of ovarian cancer, does the life insurer have a right to claim she materially misrepresented her health condition (thus justifying the denial of her beneficiary’s claim)? Or what if she read the genetic testing report but didn’t understand what the presence of the BRCA gene meant for her health? Would that be a basis for the insurer to deny the claim? We don’t yet have the answers.

A whole new frontier

At this point, most of these questions are theoretical. Given the popularity of home DNA test kits, however, these issues are almost certain to crop up in the life insurance context in the near future. As attorneys who specialize in the denial of life insurance claims, we are skeptical about how insurance companies will utilize genetic information to deny claims.

Consequently, we are watching this issue very closely. In the event life insurers do start using genetic tests as a basis to deny claims, we are betting their legal arguments will be similar those we’ve seen in the past. We have battled their lawyers for years and have come to know how they think, how they manipulate policy language, and how they intimidate consumers to maximize profits.

We handle all delayed life insurance claims and denied life insurance claims as well as beneficiary disputes and interpleader actions.

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Accelerated death benefits are based on the simple idea that if you are going to die soon, you might as well be able to use some of the cash your beneficiaries will receive upon your death. The sad fact is that end of life care is extremely expensive. Some studies have conflicted on exactly how big the challenge is, but many families are torn apart by the costs that a sick person can stack up in the last few months of his or her life.

Out-of-pocket expenses for end-of-life care averaged $39,000 in one study, and for 40% of households those bills exceeded their financial assets. These costs can add up even if you have good medical insurance. Many medical costs come out of pocket, and traveling to be near a terminally-ill loved one can cost far more than medical costs. These costs that people often forget can include lost wages from missing work or even losing a job, plus travel and lodging.

Accelerated death benefits actually came about in the early 1990s, following the AIDS crisis. AIDS was essentially a terminal illness at the time, but its victims often suffered for months in a hospital before dying. This long term care was extremely expensive, and many groups were troubled to see AIDS victims suffering financially when their beneficiaries were about to collect big payouts.

The problem is, of course, that having an insured person use up his or her life insurance benefits before death changes the whole concept of what life insurance is. For one thing, the beneficiaries may have nothing left over. Many states also initially banned such arrangements because it is confusing to customers to basically be using life insurance as disability insurance.

Proving Terminal Illness

Another challenge with accelerated death benefits is that it is hard to know exactly when someone is going to die. The rules for these policies often require that the patient must have six months to live or less. It seems like every day there is a new story about some breakthrough treatment that saved the life of a person thought to be terminally ill. AIDS, for example, was once considered a terminal illness. Now it is considered a manageable chronic illness. So defining “terminal” is hard.

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Lassen Law Firm

57 W 57th St

New York, NY 10019