Don Cornelius’ Ex-Wife May Collect $300,000 In Life Insurance Benefits Despite Suicide

The recent suicide of Don Cornelius and subsequent reports that his ex-wife, Viktoria Chapman Cornelius, is entitled to collect approximately $300,000 in life insurance benefits has caused a great deal of confusion.  Many of us wrongly assume that an act of suicide automatically precludes recovery against any life insurance policy.  In fact, no such “blanket” exclusion exists in life insurance law, and whether a beneficiary will collect life insurance proceeds following a suicide ultimately depends upon the terms of each policy.

On February 1, 2012, TMZ made a misleading report that Viktoria Chapman Cornelius has “score[d] huge life insurance payout” based on California law.  According to the TMZ Article, the ex-couple’s divorce decree provides that Viktoria was to remain beneficiary of two life insurance policies, and “[u]nder California law, if a policyholder commits suicide within [two] years of the time the policy is issued, the company can deny payment.”  TMZ prematurely concluded that because Don Cornelius took out the policy more than two years ago, Viktoria would undoubtedly collect the life insurance proceeds.  However, her right to the subject benefits cannot be confirmed without a thorough legal review of the life insurance contracts, and any reports based solely on “California law” are unfounded.

Typically, life insurance policies do expressly deny coverage for death by suicide, and such policies contain an exclusionary clause and often a definition of suicide.  For example, life insurance contracts may include a provision similar to the following: “If the insured, whether sane or insane, dies by suicide within two years from the date of the policy, no benefits are payable.”  These exclusions are generally recognized as valid.

An issue surrounding death by suicide arises, with or without an exclusionary clause, under Accidental Death & Dismemberment policies.  The concept of denying AD&D coverage for suicide is easier to understand because an intentional taking of one’s life can hardly be considered an accident.  In most cases, though, the life insurance company has the burden to prove that an insured’s death was committed with the requisite suicidal intent, and a mere intent to inflict pain which results in death will not be sufficient.  Indeed, numerous life insurance cases have involved an insured’s death caused by “erotic asphyxiation,” or the act of intentionally choking oneself or otherwise restricting oxygen to the brain for sexual gratification.  Under these circumstances, a self-inflicted death will not be considered an intentional suicide for the purposes of life insurance coverage.  Thus, while Viktoria Chapman Cornelius may collect the full $300,000 in benefits, additional information about the specific terms of Don Cornelius’ life insurance contracts is required to make a proper determination.

Don Cornelius was a pioneer whose enormous contribution to music, television, and popular culture will always be remembered and appreciated.  He is best known for his creation of “Soul Train” and its national exposure and tribute to decades of black artists and icons.  Don – wishing you eternal love, peace, and soul…

Feds Immune from Federal Employees’ Group Life Insurance Act (FEGLIA) Lawsuit for Loss of Beneficiary Designations

In Graber v. Metropolitan Life Insurance Company, a lawsuit against the United States and Metropolitan Life Insurance Company to obtain the life insurance benefits of a deceased federal employee, a U.S. District Court in Ohio ruled yesterday that the federal government has sovereign immunity for the improper maintenance of life insurance beneficiary designation forms.  The dispute arose when Metropolitan Life Insurance Company denied a life insurance claim filed by the insured’s surviving spouse and subsequently issued payment of the benefits to the insured’s brother.  Met Life based its decision on the insured’s incomplete personnel file, which contained a form designating the brother as sole beneficiary in 1996 but lacked any record of the insured’s request in 2008 to change the beneficiary to her husband.

Under the Federal Employees’ Group Life Insurance Act, the United States has waived sovereign immunity for any “breach of legal duty owed.”  Although the federal government was responsible for maintaining the insured’s personnel file, the District Court’s holding that no duty exists to properly maintain FEGLI records precludes recovery, as the federal government has not unequivocally consented to be sued for the loss, misfiling, or misplacing of beneficiary designation forms.

Sound like a bunch of nonsensical legal mumbo jumbo?  Well, that’s debatable… even federal courts are somewhat split on the issue.  Prior to the Graber decision, the Fifth Circuit concluded in Metropolitan Life v. Atkins that the federal government does have the duty to properly maintain beneficiary designation forms in the care of its FEGLI personnel clerks.  Yet, other federal courts limit the United States’ duty under the Act to only negotiating and issuing the correct FEGLI life insurance policy.

The lesson to be taken away from this discussion is two-fold.  First, if you are a federal employee with group life insurance benefits, follow-up on any beneficiary designations to ensure that your personnel file accurately reflects your intentions.  And most importantly, always consult with a life insurance lawyer about your denied life insurance claim or beneficiary dispute.  Until the Supreme Court picks a side, every “designated” beneficiary deserves to make their case.

The full court opinions referenced in this post can be found here —–> Graber v. Metropolitan Life ; Metropolitan Life v. Atkins .

For additional information on how a life insurance lawyer can help you, visit www.life-insurancelawyer.com and www.life-insurance-law-firm.com or Contact Us at (800)403-5710 to speak with an attorney about your case now.

Interim Coverage Granted For Insured Who Died Prior To Policy’s Effective Date

If an insured passes away prior to a life insurance policy’s effective date but after the first premium payment, the insurance company will likely deny the beneficiary’s life insurance claim.  This makes sense to many of us, and to many state legislators, as the application for life insurance must generally be approved before an insurance company accepts the insurance risk.

In some states, though, temporary or interim coverage is recognized when insurance companies collect premiums on the application date but fail to clearly explain the delay in life insurance coverage.  In Pennsylvania, Heather D. Lee, Esquire recently won an administrative appeal after a major life insurance company denied a claim based on the alleged “inactive” status of a policy.  The insured, who suffered an unexpected heart attack less than one week before the policy’s “effective date,” was never properly notified of any delay in coverage even though the life insurance company eagerly accepted the first premium payment.  With the assistance of an experienced life insurance lawyer, the insured’s policy was reinstated and the claim properly reviewed and paid.

Under these circumstances, an insurance company is still entitled to conduct a standard review of the application upon reinstatement because the insured’s death will have occurred within two (2) years of the policy’s effective date.  For more information on how a life insurance attorney can help you with a similar or other life insurance denial, visit www.life-insurancelawyer.com and www.life-insurance-law-firm.com, or Contact Us at (800)403-5710 for a free claim evaluation.

MEGA Life & Health Agrees to $2 Million Settlement For Abusive Insurance Practices

Following multiple and habitual violations of Rhode Island’s Small Employer Health Insurance Availability Act since 2004, MEGA Life & Health Insurance Company has reached a settlement with the State’s Health Insurance Commissioner for more than $2 million.  Pursuant to the settlement agreement, MEGA Life & Health must pay $2.3 million in restitution to approximately 5,500 self-employed Rhode Islanders due to charging excessive membership fees and premiums, wrongfully denying coverage for pre-existing conditions, and failing to provide equal coverage among its eligible health insurance customers, among other violations.

WPRI Eyewitness News On MEGA Life & Health’s $2 Million Settlement

Rhode Island is not the only state that has accused MEGA Life & Health Insurance Company of violating state laws enacted to regulate the industry and to protect consumers against bad faith insurance practices.  In 2008, HealthMarkets, Inc. and its subsidiaries [MEGA Life & Health Insurance Company, Mid-West National Life Insurance Company of Tennessee, and Chesapeake Life Insurance Company] settled a multi-state bad faith suit in the amount of $20 million for wide-spread and abusive practices.  Many states and individual policyholders have also pursued independent actions against HealthMarkets and its affiliates.

If you have concerns about your insurance company’s compliance with state laws or the terms of a life, health, or other insurance policy, you should immediately contact an experienced life insurance attorney about your case.  The Life & Property Insurance Law Offices of Heather D. Lee, Esquire offer free consultations on all life and property insurance matters.