Articles Posted in Life Insurance

It is important to understand how difficult claims that are governed by the Employee Retirement Income Security Act (ERISA) can be.  The law in this area of law is very tough for claimants.  This is illustrated again in a December 2020, opinion styled, Erica Talasek v. Unum Life Insurance Company of America, et al.  The opinion is from the Southern District of Texas, Houston Division.

The insured, Ben Talasek, had life insurance through a Plan his employer, NOV, offered.  NOV delegated authority and discretion to UNUM to handle claims and made benefit determinations.

Ben was covered by basic life insurance coverage and Ben also enrolled in a voluntary supplemental plan during November 2013.  Unlike the basic life insurance, which did not require medical underwriting, the supplemental life insurance required an employee to submit evidence of insurability and obtain approval for coverage by Unum.  On January 18, 2014, Unum sent Ben a letter informing him of an error in his application and the need for additional information.  Around this time, Ben was diagnosed with pancreatic cancer.  Ben called Unum on January 21, 2014 to check on the status of his application and was told about the January 18 letter.  Ben corrected the error on the Evidence of Insurability Form and supplied additional information.  Ben called Unum again on February 12, 2014 to check on the status of the application and was told that the standard turnaround time for a coverage decision was 4-6 weeks.  On March 3, 2014,several weeks after receiving his cancer diagnosis, Ben provided blood and urine samples and basic health history as part of Unum’s requirement that he prove insurability prior to approval of coverage.  He did not mention the cancer diagnosis.

Well, here is a case where the claim isn’t denied.  In fact it was paid.  But now the insurance company is suing the person who received the money and seeking to have the money returned.

The opinion is a 2020 opinion from the Western District of Texas, San Antonio Division, and it is styled, Metropolitan Life Insurance Company v. Lilliam Soto, Felix W. Soto.

MetLife initiated this declaratory judgment action seeking to resolve a dispute between the Soto’s.  Each assert entitlement to life insurance benefits payable under the Federal Employees’ Group Life Insurance Act (FEGLIA).  The decedent, Juan Soto, had a policy worth $350,000, which was payable on his death to his properly designated beneficiary and then, only if there was no designated beneficiary, to his wife Lilliam.

When Life Insurance claims are denied, a beneficiary should always have an insurance attorney look over the reasons for denial.  Most the time an experienced life insurance lawyer can find a way to make a recovery on the case.  But, sometimes it doesn’t work out.

An opinion form the Southern District of Texas, Houston Division, is an example where the pleadings were not sufficient to get the Court to consider coverage.  The opinion is styled, JECO Investors Partnership v. Pacific Life Insurance Company.

This is a case where a claim for life insurance benefits was denied.  The case was originally filed in State District Court and removed, by Pacific Life to Federal Court.  Pacific Life was quick to file a Motion for Judgment on the Pleadings and it was granted by the Court.  JECO then filed a Motion to Vacate Judgment and Grant Leave to Amend.  JECO’s motion was denied.

Here is a life insurance denial case that is a bit confusing at the least.  The opinion is a 2020, opinion from the Western District of Texas, San Antonio Division.  It is styled, Tina M. Hale, as next of kin of Michael Hale, Deceased v. Assurity Life Insurance Company.

On May 4, 2016, Mr. Hale obtained a 20-year term life insurance policy with a face value of $250,000 (the “Policy”) issued on form “I L0760”.  Mr. Hale paid a monthly premium of $141.81, based on the rate for a 42-year-old non-smoker.   After Mr. Hale’s death, an investigation revealed that he had been untruthful in his answer to the tobacco question on his life insurance application, and the Policy should have been issued with a Standard Tobacco rating rather than a Standard Non-Tobacco rating.  Assurity applied the premiums as if they had been paid toward a policy with a Standard Tobacco rating issued on form I L0760 and determined that the benefits payable under the policy were $99,724.74. Id.  In April 2019, Plaintiff obtained an illustration from Assurity, using form “I L1702”, for a 42-year-old male, tobacco-rated, 20-year level term policy with a benefit of $250,000, indicating a monthly premium of $107.23—less than the premium Mr. Hale had paid on his non-tobacco-rated policy.  Plaintiff asserts that the illustration demonstrates that she is entitled to an additional death benefit of $150,275.76 (the difference between the face value of the Policy and the settlement amount), plus a refund for premium over payments totaling $726.18, and 3% interest from the date of Mr. Hale’s death.

A lawsuit resulted wherein Plaintiff asserting cause of action for negligence, negligent misrepresentation, gross negligence, deceptive insurance practices, and violations of the Texas Deceptive Trade Practices Act (“DTPA”), DTPA tie-in statutes, Texas Insurance Code and Breach of Contract.

Most life insurance policies have a section / rider that allows for an acceleration of the life insurance benefits.  It is also a source of litigation because the life insurance companies have a strong tendency to deny claims made for these benefits.

Insure.com published an article on this subject in September 2019.  The article is titled, Accelerated Benefit Riders: How Your Life Insurance Can Help You While You’re Still Alive.

The article tells us , as life expectancy creeps to 80 years old, more Americans are turning to life insurance to help them while they’re still alive.  One example is an accelerated benefits rider (ABR).

This case is a dispute over who is entitled to the life insurance proceeds.  The case is from the Southern District of Texas, Houston Division, and is styled, John Hancock Life Insurance Company v. Marilyn J. Greer, Individually, As Independent Executor of The Estate of Marilyn B. Greer, and As Trustee of The Marilyn J. Greer Trust; and The Estate of William J. Greer.

William owned and was the sole named beneficiary of the policy at issue, which was a policy insuring the life of his mother Mary.  William predeceased Mary.  Mary then died.

The executor of William’s estate is Kennedy.