Life Insurance Contestability

[bevwb12]

What is the name of your state? Florida
My husband applied for and received Life insurance in May, it lapsed in August so he applied again and he there was some descrepancy with billing so it lapsed again in October. He finally got the billing issue corrected with the Insurance company, and got his policy in place effective November 5, 2004. However, he was admitted to the hospital on November 4, 2004.

He died January 23, 2005. There was a two year incontestability clause in his policy. My husband died from cardio vascular respiratory failure due to the complications of gvhd from the treatment of Leukemia. His diagnosis was not known to him when he applied for the policy back in May. However, he did know about it in August when he received a bone marrow transplant on August 26, 2004. The policy was in place at the time of the transplant, and had not lapsed until October or November.

Will the insurance company be able to deny the claim, even if my husband did not know of his diagnosis of leukemia when he applied for the policy back in May?

 

[ALawyer]

Let's see if I understand your posting.

If your husband was not aware of any adverse health condition at the time he originally applied, and if he answered the questions on the application without any misrepresentations, and if he did so again on the supplemental questionnaire that he likely was asked to complete when he took the doctor's or para-medical exam, the insurance company would not have been able to contest the policy had it not lapsed.

If however it lapsed, and to gain reinstatement he was asked to complete another health questionnaire, and he knew about his adverse health condition at that time, and made a material misstatement on the application for reinstatement, and the writen statement he made on the reinstatement application was attached to the policy the company would be able to successfully contest it. However the laws differ among the states on what happens in these cases if the missstatement on the reinstatement application is NOT attached to the policy.

Complicating this is what was the billing error that caused the policy to lapse. If the Company made the error that caused the policy to lapse, in some states you would be able to recover without consideration of the intervening changes in health or the statements on the reinstatement application (these states say if the insurance company's error clearly caused the lapse it can't duck the claim); in others the law suggests that he had a duty to pay premiums and should have called them if he did not get a bill and if he didn't he's also at fault. Lots depend on the exact facts and circumstances, and the state involved. But remember, lots of people who buy insurance and then change their minds just stop paying the premium. Then they suffer a health problem and want to go back and make believe they never lapsed the policies. Insurance companies know that, so do courts and juries.

See a good lawyer and review the facts and circumstances. Bring copies of ALL the papers with you. It may be worthwhile suing if the claim is denied, very worthwhile.