Articles Posted in Life Insurance

Here is an interesting life insurance case that takes us down a different path as it relates to what happened.  This is a Memorandum Order issued by a Magistrate Judge in the Northern District of Texas, Dallas Division.  The case is styled, Delaware Life Insurance Company of New York v. Retirement Value, LLC.

This Order results from a Federal Rule of Civil Procedure, 56, summary judgment motion in the context of a declaratory judgment action.

Here, Retirement Value moves for summary judgment on its counterclaim for declaratory relief.  That is, Retirement Value seeks a judgment declaring each of the following facts necessary to require Delaware Life Insurance Company of New York (Delaware Life) to pay Retirement Value the stated death benefits on two policies issued by Sun Life Insurance and Annuity Company of New York insuring the life of Lilly Segal (the “Segal Policies”):

Here’s is another situation that a Life Insurance Claim Attorney will learn quickly.  It deals with life insurance beneficiaries and divorces.

This is a 1987 opinion from the 14th Court of Appeals.  It is styled, Novotny v. Wittner.  It stands for the proposition that a pre-divorce designation of a former spouse is invalidated upon divorce unless the spouse is re-designated after the divorce.  This opinion is now codified in Texas Family Code, Section 9.301.

This is an appeal from the award of insurance proceeds to the successor guardian of the decedent’s children.  The dispute over the ownership of the proceeds of the life insurance policy is between the decedent’s former wife, who was the named beneficiary on the policy, the administrator of the decedent’s estate, and the successor guardian of the decedent’s two children.  The decedent and Appellant were divorced twenty-one days before the decedent’s death.  Although the divorce decree awarded all insurance on decedent’s life to him as his sole and separate property, and divested Appellant of all interest in the policies, he had not yet changed the beneficiary designation on one policy.  The trial court found that the divorce decree terminated Appellant’s beneficial interest in the policy and awarded the proceeds to the decedent’s children.  The Court agreed.

Life Insurance Attorney will quickly learn about Texas Family Code, Section 9.301.  This sections says that a spouse named as a beneficiary in a life insurance policy is automatically excluded upon divorce.

One of the first cases that discusses this issue is a 1981, Eastland Court of Appeals opinion.  It is styled, Pilot Life Ins. Co. v. Koch.  The opinion focuses on wording of the policy.  Be aware of exceptions to the general rule.

This is a declaratory judgment case.  Pilot Life Insurance Company sought a judgment declaring that it had no duty to pay life insurance proceeds to Lawrence A. Koch because of the death of his wife.  Pilot Life had issued a policy of group insurance to Koch’s employer.  The policy afforded life insurance coverage for employees and their eligible dependents. Eligible dependents were defined to include “your husband or wife, unless you were legally separated or divorced.”  Pilot Life alleged that Mr. and Mrs. Koch were legally separated on the date of her death.

Life insurance lawyers need to read this 2022, opinion from the Fort Worth Court of Appeals.  The opinion is styled, Government Personnel Mutual Life Insurance Company v. Lincoln Factoring.

Many times where a person buys an insurance policy, where they die, where a beneficiary resides, or what the contract says may play a part in determining under which State law applies to disputes over the life insurance policy.

In this case, the question dealt with whether Texas law applied to the case or whether Louisiana law applied to the case.  The facts of the case can be gleamed from reading the opinion.  Here is a brief way the Court looked at the case and what life insurance lawyers need to know about when filing a lawsuit.

Life Insurance claims are usually the type of claims that involve an interpleader action.  Here is a 2022, opinion from the El Paso Court of Appeals that involves an interpleader, however, the interpleader is related to the proceeds of an auto liability policy that involved a death.  Irregardless of the reason for the interpleader, this opinion points out some of the proper procedural aspects related to an interpleader case.

The style of the case is, Theresa Ruebbling, Individually and As Heir Of Victoria Rangel, Deceased v. Foremost County Mutual Insurance Company.

This case stems from a February 19, 2021 automobile accident that killed Victoria Rangel.  Foremost insured the vehicle Rangel was a passenger in at the time of the crash.  It agreed to pay Rangel’s heirs, her parents Theresa Ruebbling and Jorge Rangel, the $100,000 policy limit for bodily injury liability.  Foremost filed an interpleader petition under Texas Rule of Civil Procedure 43 alleging a dispute between Ruebbling and Jorge Rangel regarding the division of the insurance proceeds had caused it “reasonable doubt about how to disburse the settlement proceeds.”  Ruebbling and Jorge Rangel were both named defendants.

The incontestability period of an insurance policy is one of the most important parts of a life insurance contract.

Life insurance policies must contain an incontestability clause — a provision that the policy will be incontestable after it has been in force during the lifetime of the insured for two years from its date, except for nonpayment of premiums.  This requirement is found in Texas Insurance Code, Section 1131.104.  It is also found it sections 705.101 thru 705.105.  The effect of these clauses is to limit the misrepresentation defenses so they can apply only during the first and second years.

As stated in the 1972, Texas Supreme Court opinion styled, Minnesota Mutual Life Insurance Company v. Morse, the purpose of the incontestability clause is to protect the insured from a contest as to the validity of the policy after the set period has expired.

Life Insurance Lawyers need to be aware of Texas Insurance Code, Section 705.005.

This statute says in relevant part that an insurance company may use as a defense a misrepresentation made in the application for or in obtaining an insurance policy only if the insurance company shows at trial that before the 91st day after the date the insurance company discovered the falsity of the representation, the insurance company gave notice that the insurance company refused to be bound by the policy to the owners or beneficiaries of the insurance policy, if the insured is deceased.

The above statute is discussed in a 1969, San Antonio Court of Appeals opinion styled, Prudential Insurance Company of America v. Torres.

What if a life insurance company denies a claim for life insurance benefits based on their contention that the insured committed suicide?

A 1982, opinion from the 14th District Court of Appeals styled, Parchman v. United Liberty Life Insurance Company, correctly states that life insurance policies typically exclude suicide as an assumed risk.

In the Parchman case, the policy excluded suicide as an assumed risk for two years from the policy date and provided a reduced benefit of the return of all premiums paid if death resulted from suicide within that period.

Life insurance claims attorneys have information about how life insurance claims should be handled that is valuable to someone who believes they have been wronged by an insurance company.

It will occasionally happen that the life insurance company pays the wrong person as the beneficiary of the policy.

Texas Supreme Court law going back to 1894 says that if insurance benefits are paid to a beneficiary who does not have an insurable interest, that beneficiary holds the proceeds for the benefit of those entitled by law to the proceeds.  The 1894, case is Cheeves v. Anders.  This position is supported as late as a 1998, opinion from the Tyler Court of Appeals styled, Stillwagoner v. Travelers Insurance Company.