Life Insurance Lawyer North Carolina
Whether you reside in: Concord; Greenville; High Point; Wilmington; Cary; Fayetteville; Winston-Salem; Durham; Greensboro; Raleigh or Charlotte; our life insurance attorneys who live and work here in North Carolina are here to help resolve your delayed or denied life insurance claim.
Can a simple mistake nullify a life insurance policy?
As attorneys who specialize in contesting the denial of life insurance claims, we know that not all claim denials are wrongful. Sometimes the life insurance company has a perfectly valid reason for denying a claim.
Let’s say, for example, that a person claimed on his life insurance application that he never smoked a cigarette in his life. Yet, in truth he was a two-pack a day smoker for over 20 years. If that person later died of lung cancer during the policy term, the life insurance company would likely have a valid reason to deny any claim made against his policy.
That’s because his lie about being a non-smoker was significant enough that the insurance company probably wouldn’t have insured him had it known the truth. In contract law, that sort of lie is know as a “material misrepresentation.” A true material misrepresentation is a legitimate reason for the party to any contract to avoid its obligations under the contract.
But what happens if a person makes an innocent mistake in his life insurance application? Almost without exception, the insurance company will use that mistake as an excuse to deny any later claim against that policy. In our line of work, we see this all the time.
This article explores one such case where a simple, innocent, yet important mistake almost rendered one man’s life insurance policy as utterly useless. Fortunately, his beneficiary hired an attorney specializing in life insurance claim denials to sort the whole thing out.
A hastily prepared life insurance application
The case involved a gentleman named Greg. Greg was a pharmacist for a large chain store. As such, he received a full benefits package, which included a life insurance policy worth $70,000. Before the policy could issue, however, Greg had to fill out a lengthy health questionnaire required by the insurance company.
Like many people, Greg waited until the very last minute to fill out the application and turn it in to his company’s HR department. In his haste, he made a simple yet significant mistake. In the box that asked for his date of birth, Greg wrote September 18, 1956. In truth, his birthday was September 18, 1946. At the time Greg filled out his application, his true age was 60 years old.
Greg submitted the application to HR without catching his mistake. Along with the application paperwork, Greg was also required to remit copies of his driver’s license and health insurance card. The human resources manager collected the items from Greg, looked them over to make sure he had filled out all of the required questions, and submitted the package to the insurance company. The HR manager did not catch Greg’s mistaken entry.
A few weeks later, the life insurance company issued Greg a policy. The policy documentation also listed Greg’s birthday as September 18, 1956. Furthermore, Greg’s premium was based on the typical premium for healthy men between the ages of 50 and 55. Perhaps like most people, Greg never read over the policy itself. He simply left it in the envelope, told his wife Barbara about it, and shoved it into a file drawer in their home office. Barbara was named as the sole beneficiary under the policy.
An untimely death & a denied claim
Approximately six months following issuance of the policy, Greg was involved in an automobile accident. While driving home from work one day, a semi-truck ran a red light and crashed broadside into Greg’s pickup truck. Greg was killed instantly.
Though Barbara was devastated, she managed to dig out Greg’s life insurance policy within a few weeks of his death. She didn’t take the time to read the entirety of the lengthy document. Indeed, she skipped over nearly all of the policy language until she got to the instructions on how to file a claim. Consequently, she didn’t notice Greg’s mistaken date of birth on the policy cover page.
In order to make a claim, Barbara had to fill out a short claim form that was then submitted along with a copy of the police report from the scene of the accident and a copy of the coroner’s report. Both reports listed Greg’s correct date of birth, as the authorities had pulled the date straight off of Greg’s driver’s license. Of course, Barbara thought nothing of it. She simply presumed she was going to receive the death benefit her husband intended for her.
Barbara was shocked when she received a claim denial letter in the mail a few weeks later. She was even more shocked when the letter listed the reason for denial as “fraud and material misrepresentation.” The letter included a copy of Greg’s application with the erroneous date of birth entry. Although she figured Greg had made a simple mistake, she felt resigned to accept the denial. That’s when a relative suggested she speak to an attorney.
The attorney looked over Greg’s entire application, as well as the claim forms Barbara had submitted. To him, it was very significant that Greg had submitted copies of his driver’s license and health insurance card as part of his application. Both listed Greg’s true date of birth and there was no indication he had tried to obscure that information.
Ultimately, the attorney sued the life insurance company on Barbara’s behalf. The court agreed that Greg had not intended to deceive the insurer. To the contrary, the court found the company had ample evidence of Greg’s true age. Thus, the court ordered the insurer to pay Barbara the full policy benefit with interest. To make things equitable for the insurance company, the court subtracted from that award the difference in premiums that Greg would have paid had the company known his true age. At the end of the day, it was a fair result for everyone.
If you’re facing denial of a life insurance claim based on a mistaken application entry, call us today. We may be able to help rectify the mistake and get you the benefit that was intended for you.
- 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.