Can a life insurance company deny a life insurance claim due to an alleged misrepresentation in the application? Maybe not.
Here is a 1996 opinion from the United State Southern District of Texas. The opinion is styled, Bates v. Jackson National Life Insurance Company.
Bates’ children sued Jackson National for proceeds of a life insurance policy issued to Bates. They asserted causes of action for breach of contract, bad faith, and Insurance Code violations and DTPA violations.
On October 31, 1991 and November 1, 1991, Bates was diagnosed with phlebothrombosis and diabetes. On November 12, 1991, Bates submitted an application to Jackson National in which he represented he had not consulted or been treated by a physician in the last five years and that he had not submitted to an x-ray or any laboratory studies or tests. Furthermore, Bates represented din the application that he had not been told he had any disease, abnormality or diabetes. The policy was issued and the application was attached to and made a part of the policy.
On November 1, 1992, Mr. Bates was murdered by an ex-lover of his girlfriend/common law wife. Plaintiffs timely filed a claim with Jackson National. Jackson National denied coverage based on material misrepresentations made by Bates in the application for insurance.
Plaintiffs acknowledged that the application contained false representations and that Jackson National relied on those representations. Plaintiffs dispute, however, that Bates intended to misrepresent information to Jackson National or that the misrepresentations were material.
A material misrepresentation in an insurance application does not defeat recovery if the misrepresentation was made innocently and in good faith. An insured’s mere knowledge of his or her health condition is insufficient to prove intent to deceive as a matter of law. Accordingly, a fact issue exists as to whether or not Bates intended to deceive Jackson National.
Accordingly, summary judgment is granted for Jackson National.