Attempting to collect benefits from optional life insurance plan

[triky]

What is the name of your state? CALIFORNIA



I am writing to inquire about the life insurance policy of my late husband, a former Boeing employee. My husband was an active employee through 2000. In 2000, my husband was forced into early retirement due to illness that impaired his ability to communicate. My husband passed away in the middle of last year.

I only RECENTLY became aware through chance correspondence from Met Life that my husband had a life insurance policy which he paid monthly premiums for, while he was an active employee. Upon review, I found this is well evidenced by paycheck stubs. His life insurance premiums, as itemized on his paycheck, were described as “Spouse Life Insurance” and “Optional Life Insurance.” As his surviving spouse, and sole designated beneficiary in all things, the payment of benefits under the “Spouse Life Insurance” portion of the policy has been settled by Met Life. With regards to the “Optional Life Insurance” portion of the policy, they don't have information on it in their records and informed me that I should address Boeing Company for authorization so that Met Life could settle this claim. Upon retirement, or anytime thereafter, my husband never received materials regarding the status of his life insurance policy which he faithfully paid premiums on for many years.

If this "optional life insurance coverage" which he paid for happens to be term life insurance can I contest it's possible expiration due to failure to notify of policy termination...because as I mentioned no paperwork regarding life insurance was ever received. Please advise.

Thanks

 

[ShyCat]

Your husband's "Spouse Life Insurance" paid you as the beneficiary when he died? That doesn't make any sense. As far as I know, "Spouse Life Insurance" is term life insurance on the employee's spouse. If the employee's spouse dies, the employee collects that benefit as the beneficiary. It doesn't pay the spouse when the employee dies.... that's backwards.

As for the "Optional Life Insurance", were these premiums paid by your husband's employer after he retired as a retirement benefit? Or were the premiums deducted from his pension check same as they had been from his paychecks?

Otherwise, if your husband did not convert this to an individual policy upon retirement and continued to pay the premiums directly to the MetLife (where before the premiums were paid by payroll deduction), that term life insurance policy would have lapsed upon termination of employment.

 

[ALawyer]

I would suggest that the first step is sending a well crafted letter to Boeing and asking their employee benefits office what the deduction was for, what the terms of the coverages he bought while employed were, and whether he continued to receive coverage as a disabled or retired employee. Boeing historically has been a reasonable and responsible company and MetLife has been a reasonable and responsible insurer. That is not to say they do not make mistakes -- sometimes doozies -- but they are among the best in their class.

If your husband had purchased optional term life, whether he could have maintained the coverage after disability or retirement depends on the terms of the group policies involved. Also, some optional term life stops or significantly decreases or gradually declines at age 65 or retirement. Most group policies provide conversion rights, but the nature of those rights differs from policy to policy, and it is possible the conversion right only kicks in prior to age X. In any event the individual policy forms that they convert into are typically VERY expensive as only the very ill and dying actually convert -- healthy people who lose group coverage typically go through underwriting and get a new policy at far more favorable rates. I do not know of any rule that requires a life insurance company or employer to specifically notify someone of life insurance conversion rights -- we are all presumed to know the terms of what we buy -- although I do know employers generally dislike conversions are they are esssentially charged a hefty fee by the carrier for each conversion cost, so even if disclosure is made, it would not likely be in 72 point type.

 

[triky]

^^

Thank you kindly for the reponses to my initial query. I have taken the points and suggestions under advisement and will draft an appropriate letter in short order. Your assistance is most appreciated.