Life Insurance Lawyer Rhode Island
Rhode Island Denied Life Insurance Claims Recently Settled
- Prudential invalid beneficiary designation $405,000.00
- HSBC felony exclusion crime commission $321,000.00
- AIG alcohol exclusion drunk driving death $288,00
- Rhode Island denied life insurance claim $1,653,000.00
- Globe the contestability period medical $104,000.00
- FEGLI appeal won after legal brief $139,000.00
- Stonebridge policy not in force supposedly $250,000.00
- ERISA appeal denial of benefits $184,000.00
- Gerber sickness exclusion resolved $277,000.00
- Denied life insurance claim Rhode Island $2,045,200.00
- SGLI ex-wife versus child dispute $400.00/00
- American General interpleader $300,000.00
- Genworth prescription drug exclusion $109,000.00
- Rhode Island life insurance and divorce $518,000.00
- Nationwide autoerotic asphyxiation death $253,000.00
- Rhode Island bad faith life insurance $629,000.00
- AARP misrepresentation on application $301,900.00
How long can life insurance companies milk the period of contestability?
Life insurance, at its core, is a gamble. The life insurance company is betting that it will collect an appropriate amount of premiums from its policyholder for an appropriate amount of time so that when that policyholder dies, the payout will not exceed what the company has collected from that policyholder in premiums.
The policyholder is less of a conscious gambler in this scenario. While it would be a financial windfall to pay fewer premiums than his beneficiary ultimately receives when he dies, the policyholder really only cares that his designated beneficiary is taken care of after his death.
One particularly tricky period in the relationship between an life insurance company and its insured is what’s known as the “period of contestability.” Typically, this is a period that begins when the policy becomes effective and continues for exactly two years. If the policyholder dies during those two years, the insurance company can conduct all sorts of investigations into the cause of death and contest the viability of the life insurance policy on a number of bases.
These sorts of investigations are expected during the period of contestability and are well-respected by the law. Unfortunately, however, life insurance companies often manipulate the period of contestability to fit their own devices. Specifically, they will use a death that occurs during that period as an excuse to conduct endless “investigations” and to severely delay the payment of legitimate claims.
As attorneys who specialize in the wrongful denial of life insurance claims, we see this all the time. Insurance companies typically lose money when they have to pay a claim within the first two years of the policy period. Consequently, any time we are faced with a denial during that period, we are instantly suspicious of the life insurer’s motive.
This article examines the plight of one family who was caught in a period of contestability nightmare until they got the right lawyer involved.
A baffling death
The case involved a 48 year old man named Ken. Ken was exceptionally healthy for his age. He was a long-distance runner, ate healthy foods, didn’t drink or smoke, and rarely, if ever, got sick. He also visited his physician like clockwork at the beginning of each year in order to get a complete physical and take blood tests. Aside from minor injuries related to running, his examination and blood work always revealed that he was the portrait of health.
Ken had been married to his wife Kim since his early twenties. The couple never had children. Ken worked as a physician’s assistant at a large hospital and Kim was an aesthetician. They had a good marriage, a big house, lots of friends, and were always very active together. To most outsiders, it was the idyllic life.
Ken and Kim both had $500,000 life insurance policies that were supplied by Ken’s employer. Like many policy, Ken’s policy contained a two-year “period of contestability.” To the extent Ken or Kim ever thought about their life insurance policy terms at all, they certainly wouldn’t have been concerned about outliving the contestability period as they lived the healthiest of lifestyles and had no medical concerns whatsoever.
In September 2005, however, the unthinkable happened. Kim woke up at seven o’clock one morning and was surprised to see that Ken was still in bed. Typically he was up and out for his morning run by 5:00 am. When she leaned over to wake him, she was horrified to find that his body was cold and stiff. It was very clear that Ken had been dead for some time.
Kim immediately dialed 911 and within moments the police and paramedics arrived. Not surprisingly, Ken was declared dead at the scene. Given the unusual circumstances surrounding his death, a full autopsy report ensued. Though it took several weeks to get any word from the coroner, the final report revealed the following: (1) Ken did not have any drugs in his system at the time of death; (2) his body did not show any signs of disease such as cancer or heart disease; (3) he had no brain abnormalities; and (4) his cause of death was unknown.
No claim denial, just endless claim delay
In the meantime, Kim filed a claim for policy benefits with Ken’s life insurance company. The first correspondence she received in reply stated that the insurer was unable to process the claim until the coroner’s report was completed. Kim understood that, waited patiently, and forwarded the coroner’s report to the insurer once she had it. At that point, she expected the claim to be paid.
She was sorely disappointed, however, when the life insurer continued to stall. The company claimed that given that the cause of death was unknown and the policy was still in the contestability period, it had to conduct its own investigation before it could pay the claim. Months went by with no word. Kim called the insurer roughly every four weeks and never got any answers or any indication that payment would be made. Importantly, however, she never got an outright claim denial from the life insurance company even though a full year had passed since Ken’s death.
That’s when Kim called an attorney specializing in the denial of life insurance claims. The attorney was instantly familiar with the insurance company’s tactics – it was simply stalling as long as it could, hoping that Kim would stop asking for the money. When his calls to the insurance company on her behalf went unanswered, he and Kim decided to file suit.
Ultimately, the court was found the insurance company’s delays to be unreasonable. While the company certainly had the right to conduct its own investigation into Ken’s death, it was unable to show at trial that it had made any meaningful inquiry in the year since Ken passed. Kim was awarded full policy benefits, with interest.
If you are facing unreasonable delays from a life insurance company, please don’t hesitate to call our firm. We handle these types of cases all the time and we’re happy 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.