Additional Life Ins. Denied thru Employer Sponsored Plan

[Dave325]

Hello,
At the end of last year (2001), I signed up for additional life insurance thru my company. I already have a $1 X base pay life policy as a company benefit.

After 2 full months of paying for this insurance by payroll deduction, I get a letter from the insurance company saying that my additional life policy has been declined due to my statement of "diabetes" as a medical condition.

Can this insurance company deny/decline my coverage after paying in good faith for nearly 8 weeks?

Can they also decline/deny me coverage anyhow...I thought they could only rate me a higher premium?

Any advice or info you have would be great, Thanks
Dave325

 

[ALawyer]

At most very large employers with "cafeteria plans" with a group life option, the employee may increase the amount once a year, usually just by 1X, such as going to 2X from 1x, or 4x from 3X. And most large employer based do NOT do any underwiriting on group plans, only "actively at work". HOWEVER, this can lead to adverse selection -- meaning the sicker apply for more. So some carriers and employers have started asking questions.

My sense is that the employer is rather samll, and the additonal coverage is underwritten, using simplified underwriting criteria. And as far as I know, that's not illegal. You have NO constitutional right to have private insurance companies issue insurance to you.