Life insurance - payment denied

[Taysmomma]

What is the name of your state? Tennessee

My girlfriend's ex-husband passed away in Jan 2002, and had a substatial life insurance policy in effect, with her as the beneficiary. After almost 6 months of waiting (the IRS was involved, and the company was researching his health), the insurance company refused to pay the claim. From what I gather, he had not disclosed a previous heart attack.

Questions: does an insurance company usually have a physical or in some way check the health history of people that apply for insurance (this started as a $100 thousand policy and was upped to $250 thousand)? The reason I ask is because he was well-known in the town he lived in, and I was wondering if there was some negligence on the part of the company (or at least the underwriter).

Other question: what happens to the premiums? Do these get refunded to the beneficiary, the estate, or does the company just keep them? She has seen nothing at all from the company, and I was trying to find out if she is entitled to anything at all.

Thank you for your time...

TC

 

[CIAA]

Taysmomma,

The policy can be rescinded (voided) for application misrepresentations or misstatements, if : (1) the misrepresentation was "material to the risk"; that is, if the coverage would not have been issued as applied for had the true facts been known, and (2) if the policy had not been in force for two years during the insureds lifetime.

Note: Some policies allow for rescission after the two year limit referred to if the misrepresentaions were made with the intent to defraud (a much higher burden to prove).

If a policy is rescinded, all premiums paid for coverage must be refunded. While it may be expected that the refund would go to the beneficiary, since the policy has been voide in its entirety, there would technically be no beneficiary and therefore the premiums would most likely be refunded to the Estate of the insured.

We are not attorneys and do not give legal advice or legal opinions. Any opinions or comments in our response should not be regarded as a substitute for professional legal advice.

 

[Kevin O'Keefe]

My girlfriend's ex-husband passed away in Jan 2002, and had a substatial life insurance policy in effect, with her as the beneficiary. After almost 6 months of waiting (the IRS was involved, and the company was researching his health), the insurance company refused to pay the claim. From what I gather, he had not disclosed a previous heart attack.

Questions: does an insurance company usually have a physical or in some way check the health history of people that apply for insurance (this started as a $100 thousand policy and was upped to $250 thousand)? TC [/B]

It will vary on the age of the insured and the amount of the policy whether a physical will be done.

It is not unusual for insurance companies to try and avoid their responsibilities if they think they can get away with it. Unfortunately it happens all to often when people accept what the insurance company says without speaking to a good lawyer. This could well be the case here. You or your girlfriend should call a good plaintiff's trial lawyer to learn more and see what rights she may have. It costs nothing to speak with the best. Begin your search with members of the Association of Trial Lawyers of America and the Tennessee Trial Lawyers Association.

Best of luck.

- Kevin

 

[Dandy Don]

You should also consider contacting your state's insurance commissioner (nearly all of them have websites) to file a complaint against this insurance company that the commissioner will investigate to find out if the insurance company acted reasonably or not. To get the Tennessee State Insurance Commissioner's address and/or e-mail, contact your local library or do a search in www.yahoo.com using the phrase "Tennessee Insurance Commissioner" to see if his website comes up.

At the very least, the premiums should be refunded if they are not going to pay out.

DANDY DON IN OKLAHOMA ([email protected])