Life & Property Insurance Law Offices of Heather D. Lee Now Serving Colorado & Florida

The Life & Property Insurance Law Offices of Heather D. Lee is now serving clients throughout the States of Colorado and Florida.  If you are an insured or beneficiary whose life insurance proceeds are being withheld during a difficult time, let us handle the life insurance company so that you can focus on recovering, and on your family.

Attorney Heather D. Lee offers free case evaluations and low contingent fee arrangements on all cases.  That means you can obtain quality legal representation without worrying about how to afford an attorney.  If we are unsuccessful in collecting your delayed or denied life insurance claim, you will owe no legal fees whatsoever.  Contact Us today at (800)403-5710 or visit www.coloradolifeinsurancelawyer.com and www.floridalifeinsurance.lawyer for more information about our law practice.

The Life & Property Insurance Lawyer Expands to the Great State of New York

We are proud to announce that the Life & Property Insurance Law Offices of Heather D. Lee is now serving New York.  Founder and life insurance attorney Heather D. Lee visited Albany this week to attend the Supreme Court of New York’s admission ceremony.

New York Life Insurance Lawyer

The more we expand, the greater number of people we can protect against wrongfully delayed and denied insurance claims.  If your life or property insurance claim has been delayed or denied, the Law Offices of Heather D. Lee may be able to assist you.  We provide free consultations on all potential cases, so you have nothing to lose and everything to gain by contacting us.

Visit our websites at www.life-insurancelawyer.com and www.life-insurance-law-firm.com for more information, or call us at (800)403-5710 to speak to a life insurance lawyer now.

The Insurable Interest Doctrine and Its Effect on Your Life Insurance Claim

It may seem surprising that life insurance claims are commonly denied, and for many different reasons.  Life insurance companies reportedly refuse payment on approximately 5,000 policies each year, although we believe this figure is much higher.  One interesting reason that life insurance claims can be denied involves the lack of an insurable interest.  According to the insurable interest doctrine, in most states an individual cannot take an insurance policy out on the life of another person without having a legally-recognized insurable interest in that person’s life.  In other words, one cannot insure the life of another unless he or she derives some benefit or advantage from the continuance of the insured’s life.  The law does not want to encourage the practice of “wagering” on the life of another.  Allowing an individual to procure a policy on someone’s life without requiring the existence of an insurable interest may open the door to crimes being committed against the insured person.

The rules setting forth what constitutes a sufficient relationship differ amongst the states.  Generally, states consider the insurable interest requirement to be satisfied by blood ties or other affection-based relationships.  In many states, a monetary tie such as a business partnership is sufficient to create an insurable interest.  The line drawn by the various state statutes remains fuzzy, to say the least.  The majority of courts have found that determining whether a relationship gives rise to a sufficient insurable interest is a fact issue, meaning it is determinable on a case-by-case basis.

Whether an insurable interest exists is relatively easy to determine in some relationships.  For example, a husband and wife will almost always be found to have an insurable interest in each other’s lives.  But what about an unmarried couple?  Or grandparents and grandchildren?  Even the relationship between parent and child is treated differently depending on the state where the policy is issued.  For example, Illinois courts have found that the blood tie alone can be insufficient and have, in some cases, required a showing of monetary interest in order to bolster the insurable interest.  In New York and Pennsylvania, on the other hand, the parent-child relationship alone establishes an insurable interest sufficient to take out a life policy.

To further complicate the insurable interest doctrine, courts have held that expiration of the contestable period for life insurance policies does not defeat a claim denial for lack of an insurable interest.  Typically, insurance companies have a 2-year period to challenge the validity of a policy.  The vast majority of jurisdictions have held, however, that a lack of insurable interest can be raised to challenge a policy’s validity at any time, even after the contestable period has passed.  In New York, an outlier state, life insurance companies cannot refuse payment on such a basis unless the challenge was raised within the contestable period, which begins to run on the policy’s date of issue.

The lack of uniformity with respect to what constitutes an insurable interest can cause a great deal of confusion for beneficiaries.  Without the assistance of an experienced life insurance attorney, a proper beneficiary may lose the right to collect against a policy based on an insurance company’s arbitrary determination that a sufficient insurable interest does not exist.  If your life insurance claim has been delayed or denied, you should speak to a life insurance lawyer about the facts specific to your case immediately.

Common Reasons For Delaying & Denying Life Insurance Claims

At least 5,000 life insurance claims are denied in the United States every year, and even more policies go unclaimed.  People are usually surprised to discover that life insurance companies can delay or deny claims for many different reasons.  In fact, most people believe that when an insured passes away, the beneficiary receives a payout immediately.  Unfortunately, this is too often not the case.  Like most businesses, life insurance companies are motivated by profit, having a strong financial incentive to collect premiums but later deny as many life insurance claims as possible, or to delay claims as long as possible.

DELAYED LIFE INSURANCE CLAIMS

If a life insurance company has failed to promptly issue payment of your life insurance proceeds, you may have a claim for breach of contract and bad faith insurance practices.  Life insurance companies must investigate your claim within a reasonable period of time, usually within sixty (60) days of the claim being filed or in accordance with the life insurance policy terms.  An insurance company may attempt to discourage you from hiring a life insurance lawyer by wrongfully delaying your life insurance claim, offering a reduced settlement amount, or making other efforts to avoid paying the full claim.

Some common tactics that life insurance companies will use to wrongfully delay your claim include but are not limited to the following:

Insured’s Death Occurring Within Contestable Period
Hospital Records/Medical Documentation Not Yet Received
Hospital or Medical Provider Refuses to Release Records
Failure to Provide Income Tax Returns
Failure to Provide Non-existent Medical Documentation
Independent Investigation Based on Suspicious Cause of Death
Independent Medical Review to Dispute Evidence
Beneficiary Dispute Based On Divorce
Beneficiary Dispute Based On Suspicious Cause of Death

No matter how badly you need the insurance proceeds, you should never accept a settlement offer without the advice of an experienced life insurance attorney.  An offer to settle your claim for a reduced amount may indicate that the insurance company’s reason for delaying or denying your claim is illegitimate.

To discourage beneficiaries from pursuing a wrongfully denied life insurance claim, life insurance companies will mail complex denial letters designed to confuse you.  Life insurance companies know that you are likely unfamiliar with the life insurance contract itself, or with your rights as the beneficiary.

Some common tactics that insurance companies will use to wrongfully deny your claim include but are not limited to the following:

Policy Lapse Due to Nonpayment
Misrepresentations Regarding Age, Employment and/or Income
Failure to Disclose Immaterial Pre-Existing Medical Condition
Failure to Disclose Medical Appointments/Regular Check-Ups
Failure to Disclose Unknown/Unofficial Medical Diagnosis
Failure to Disclose Condition Requiring Future Treatment
Failure to Disclose Prior Alcohol, Drug, or Tobacco Use
Failure to Disclose Criminal History on Application for Insurance
Accidental Death Related to Independent Medical Condition
Accidental Death Actually Self-Inflicted
Accidental Death Caused by Alcohol/Drug Use or Crime
Accidental Death Not Occurring Within Specific Time/Date
Accidental Overdose Caused by Misuse of Medication
Policy Not Active Due to Death Occurring Prior to Effective Date
Policy Not Active Based on Period of Limited Activity Exclusion
Independent Investigation Based on Suspicious Cause of Death
Insufficient Evidence to Show Heart Attack
Independent Medical Examiner Disputes Evidence
Change In Health After Policy Lapse Due to Nonpayment
Change In Health Condition Prior to Effective Date of Insurance
Handwriting Expert Claims False Application Signature
Failure to Elect and/or Qualify for Employment Coverage
Failure to Convert Employment Coverage to Individual Policy
Insurance Company Not Responsible for Agency Errors
Insured Not Resident of United States on Date of Death
Failure to Properly Change Beneficiary
Policy Lapse Due to Depleted Cash Value

Many insurance companies have large legal departments prepared to defend denied life insurance claims, which can discourage a beneficiary from hiring a life insurance attorney, appealing a denied life insurance claim, or filing a law suit.

The Life & Property Insurance Law Offices of Heather D. Lee, Esquire are familiar with the various tactics used by life insurance companies to delay and deny claims, and we are experienced in pressuring insurance companies to quickly complete the claims process and pay all proceeds due under their life insurance policies.  If your insurance claim is being wrongfully delayed or denied, Contact Us for your free case evaluation today.

 

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.

Protecting Your Rights & Your Family

The Life & Property Insurance Law Offices of Heather D. Lee, Esquire assist insured persons and their beneficiaries on delayed and denied life insurance claims, homeowners and renters insurance disputes, and other contract and consumer protection matters.  Our mission is to protect your rights and your family by ensuring that powerful insurance companies fulfill their legal and contractual obligations to you.

While the Life Insurance Law Bloggers are primarily focused on life and property insurance matters, it is our priority to provide helpful information regarding many areas of civil claims and consumer law.  The information on this site may not apply to your state, as insurance laws vary from state-to-state.  The Life & Property Insurance Law Offices of Heather D. Lee, Esquire are located in New York, Pennsylvania, and Colorado.  The information on the Life & Property Insurance Lawyer Blog is NOT and should NOT be construed as legal advice.  The information contained in this website does not create an attorney-client relationship between any person who reads such information and Heather D. Lee, Esquire and/or the Life & Property Insurance Law Bloggers.

For your free case evaluation, Contact Us to speak with an experienced life and property insurance attorney about the details of your claim today.