Life Insurance

[kzort]

Life Insurance Physical request after cancer diagnosis

What is the name of your state? CA

I got married in October 2003 and purchased a $100,000 life insurance policy on my new husband, thru my employer's group policy, to be effective 1/1/04. On January 26, 2004, my husband was diagnosed with cancer.

FOUR MONTHS LATER, on April 9, 2004, we were contacted by a physican working on behalf of the insurance company, notifying us that they needed my husband to take a physical in order to validate the policy.

When we applied for the policy we had no idea that he had cancer and, had they conducted the physical prior to 1/26/04, he mostly likely would have passed.

Do I have any recourse if they deny him coverage, since now knowing he has cancer, I'm sure we'll never be able to obtain life insurance on him again.

Thanks

 

[ALawyer]

First, I am sorry to learn of your husband's misfortune.

In terms of life insurance, many employer sponsored group life plans are part of a cafeterial plan which enable the employee to AUTOMATICALLY ELECT life coverage up to a certain limit (often half of what the employee can get or $50K to $100k) on a spouse without any evidence of insurability, if the request comes during the once a year window when it comes time to re-select benefits. If that were the case here, no formal application or health questionnaire would have been asked for and no underwriter -- much less a physician -- should have called.

Some employer plans provide for only OPTIONAL coverage for dependents, subject to the carrier's normal underwriting. In that case one fills out an application and gets underwritten and if the person passes the policy is issued. TYPICALLY the terms of those applications provide that the employee must be in the same good state of health at the time of issue and when the application was made.

There are a few things that I don't understand, including why a medical exam by a physician was needed on just $100,000, as that amount often involves merely a blood test and/or para-medic exam, and that only if the applicant is north of 40 or 50. If your husband had prior health problems, that may explain it.

In any event, while it did seem to take longer than it should have to underwrite the case (assuming there was an underwriting requirement) if there was a material change in health learned between application and issue, the company would not issue the policy, and if it asked him to confirm good health and he lied, the policy could be challanged and benefits denied if he were to have died before the contestable period (2 years) elapsed. Here unless I am mising something, you seem to be out of luck UNLESS there was no right to underwrite.

 

[kzort]

Thanks ALawyer for your response.

Since we were married in October, I added him as of January 1st because that's when my employer allows changes and additions.

As far as we knew, my husband was in good health when I requested the insurance, so no, we didn't lie. He is 51 years old and it is just a para-medic examine that they are requesting, but since January 1st, he's had a kidney removed, had hip and arm radiation, brain radiation and is scheduled to begin Chemo in 3 weeks. It's been a devastating 3 months to say the least and this was just the latest blow in a series of blows !

Again, thanks for your help. I'm just about out of fight and it's actually kind of a relief to clear one off my plate ! Now I can devote more time to fighting with my HMO and for my husband's life :~ (