Life Insurance Claim Denied

[2old2care]

What is the name of your state? Kentucky

My Brother and his wife purchased Life Insurance Jan '06. Both were in bad health and did not hide their health issues. The insurance agent presented them with a plan that was one of those "Answer a few simple questions" type deals. They signed on, answered the questions, and paid the premiums.

Within a couple weeks, the Life Insurer Carrier came back with additional questions about their health conditions. They answered, the Insurance Company seemed satisfied, and Brother and SIL never heard from the Insurance company or agent again.

SIL was a juvenile (Type I?) diabetic, suffered renal failure, and received a kidney transplant approx 10 years ago. Since then, her only other health problem requiring hospitalization and treatment was an abdominal dermal infection. She remained on insulin therapy and anti rejection medications.

In March, SIL suffered a diabetic coma which caused Brother to call in paramedics. The paramedics were able to awaken SIL, but decided to transport her to the hospital to stabilize her blood sugar levels. SIL had one infection after another. First a staph infection on her leg. Then pneumonia. At the end, the doctors realized SIL had no circulation to the staph infected leg and amputated it. 3 days later, SIL died.

The death Certificate listed Primary cause of death as Heart Attack. In KY there are 2 additional boxes where additional factors are listed. One box said Pulmonary Failure. The 2nd box said Kidney Failure. KY DC's also ask if the patient was a Diabetic. That box was checked Yes. Was diabetes a contributing factor to death. That box was checked No.

Brother says that earlier in the day, SIL's nephrologist had reported that SIL's kidney values were all good.

Upon review of medical records from 2 doctors and the hospital, the life insurance carrier denied payment of the claim. Brother was so shocked, he did not think to ask why. The Insurance provider is sending a letter of explanation AND they are refunding the premiums that had been paid for SIL's life insurance policy.

Thoughts about this situation??What is the name of your state? Kentucky

 

[Bigfoot]

Return of premiums is not unusual. Look closely at the application as completed by the agent to determine if any information was incorrect. When a potential client has any health problems (especially of the magnitude that you describe) some companies have at least 2 different types: modified/reduced benefits policy, which will provide some coverage up to 2 years before providing full coverage or one with an absolute 2 year waiting period, where little info is required from the client, however, premiums will be returned if death occurs prior to two years; or full coverage.

 

[Dandy Don]

You must wait and see what the insurance company based their decision on before you decide how to proceed--their reason may be justifiable (and mentioned in the policy, as explained to you in the prior response) or if it seems unreasonable you have the option of filing a complaint with your state insurance commissioner for further investigation or retaining your own attorney to file a lawsuit against the insurance company.

DANDY DON IN OKLAHOMA ([email protected])

 

[2old2care]

Thanks So Much!!

Thanks so much for the responses!!

When Brother told me of this, I asked if he'd been give a reason why the Insurance company denied payment. He said he was so shocked at the news he did not think to ask. That's when the Lady he was speaking to said he'd be receiving a letter of explanation along with a check refunding the premiums paid in the mail.

This is not a huge Insurance claim. They initially bought $10K each. Basically burial insurance with some extra was their thought. Then Brother spent the whole $10K burying his wife. Extremely modest funeral. So Brother has subsequently upped his own Insurance to $15K.

I do remember Brother said at some point in talking to the Life Insurance company, there was a mention of a 2 year time period. This fits with the comments above.

Thanks much for the tips!! Now I have some direction for Brother. While he's waiting for the Letter of Denial, he can dig out his policy and read up on the finer points of their coverage.

 

[ALawyer]

My sense is this is likely a modified benefit life policy, in which the only payment the beneficiary receives if the death occurs in the first 2 years of the policy going "in force" is return of the premium paid. One thing I would suggest; read the policy itself. I it a different type of policy, and here is no "material misrepresentation," don't cash the refund of premium payment check as in some states that can sometimes create an "accord and satisfaction" and a waiver of other claims you may heve.