Life Insurance

Statement In Insurance Application

May 16, 2015 | Mark S. Humphreys

Dallas life insurance lawyers need to read this 1979, Amarillo Court of Appeals opinion. It is styled, Allied Bankers Life Insurance Company v. Mary De La Cerda.

On December 27, 1976, Paul A. De La Cerda secured a $9,000 group credit life insurance certificate from Allied. The certificate contained a statement that the insured had not been, nor was being, treated for certain diseases and that he was in good health.

On February 3, 1977, insured died. The cause of death was diagnosed as acute myocardial infarction superimposed upon a previous anterolateral infarction. The bank filed its claim under the certificate, which was denied by Allied. Thereafter, the bank assigned its interest to Mrs. De La Cerda.

Life Insurance

May 12, 2015 | Mark S. Humphreys

Palo Pinto County insurance lawyers need to understand life insurance.

Life insurance pays a stated amount of benefits to the beneficiary upon the insured’s death. Typically, the policy has a “face amount” that is, a stated value that is payable. Some policies may offer increased benefits if the insured dies from certain causes. For example, some policies pay “double indemnity” benefits if the insured dies in an accident.

“Term” policies pay a fixed amount stated in the policy. Whole life policies accumulate cash value. On the other hand, if the policy allows the insured to borrow against the policy, the death benefit may be reduced by the amount of any outstanding loans.

Life Insurance Application

May 10, 2015 | Mark S. Humphreys

The life insurance application must be attached to the life insurance policy. Any experienced life insurance attorney in the Dallas and Fort Worth area can tell you this. It is emphasized in a Texas Supreme Court case in 1975, styled, Johnson v. Prudential Insurance Co. of America.

This is a lawsuit to collect benefits under a group life insurance policy. The insurance company resisted payment on the ground that the deceased insured willfully deceived the company by her statements made in procuring coverage; the company has obtained favorable findings to support this defense. This appealed followed.

Katherine Johnson was a teacher who obtained insurance upon her life under a group policy issued by the Prudential. She applied for insurance coverage on November 12, 1968. Prudential issued its certificate for her coverage, effective January 1, 1969. The amount of the original benefit was $10,000; it was raised to $12,000 in April of 1969 and then to $15,000 in 1970. Katherine Johnson died on November 16, 1970; her husband was the beneficiary on the insurance contract and brought this suit against the insurer on June 25, 1971.

Temporary Life Insurance Policy

May 7, 2015 | Mark S. Humphreys

Here is an interesting twist for local life insurance attorneys. This is a 1997, Fifth Circuit Court of Appeals case. It is styled, Riner v. Allstate Life Insurance Company.

Riner sued Allstate after Allstate refused to pay benefits under a temporary insurance agreement on the life of her father, Robert Marriott. Allstate defended on the theory that alleged misrepresentations in the insurance application absolved it of liability . The district court granted summary judgment (MSJ) in favor of Allstate, and Riner appealed. The Court reversed the MSJ and ruled in favor of RIner.

Prior to 1994, Mr. Marriott had five back surgeries, which left him with chronic back pain and in depression. Riner wanted to take a life insurance policy naming Riner as beneficiary. On June 29, 1994, Allstate sent an agent to Mr. Marriott’s home to take his application information. Allstate’s lengthy standardized application contained a list of medical questions. The applicant responded to those questions by checking boxes marked “yes” or “no.” When a box was marked “yes,” the application contained additional space for further explanation by the applicant. Mr. Marriott disclosed that he had chronic back problems and certain other medical problems. Mr. Marriott’s application is marked “no,” however, with respect to whether he had ever received treatment for the use of alcohol or received treatment for depression within the past three years.

Application As Part Of The Policy

May 5, 2015 | Mark S. Humphreys

Fort Worth life insurance lawyers can tell you that a policy of life insurance must have attached to it, a copy of the application. Texas Insurance Code, Section 705.103 clearly states:

Except as otherwise provided by this code, a life insurance policy must be accompanied by a copy of:

(1) the policy application; and (2) any questions and answers given in connection with the application.

Denial Of Life Insurance Claim Based On A Misrepresentation In An Application

May 3, 2015 | Mark S. Humphreys

Dallas insurance lawyers will see lots of situations where a person has their life insurance claim denied for the stated reason that the insured made a misrepresentation in the application for insurance. There are a few common law rules standards that apply. It is also important at this stage to understand what the Texas Insurance Code states.

There are several statutory provisions regulating an insurance company’s ability to avoid coverage based on a misrepresentation by the insured in their application for insurance. These statutes are found in the Texas Insurance Code sections 705 and 1201.

Texas Insurance Code, Section 705.003 states: A provision stating that a misrepresentation in a proof of loss makes the policy void or voidable is of no effect and is not a defense, unless the misrepresentation was:

Rescission Of Insurance Policy

May 2, 2015 | Mark S. Humphreys

Texas insurance lawyers need to have an understanding about the reasons an insurance can properly rescind a policy or to put it another way – the reasons an insurance company cannot properly rescind a policy.

As a general principle, prior to a loss an insurance company has the right to rescind a policy procured through mutual mistake or fraud. This was the ruling in a 1931, case from the Amarillo Court of Appeals and is still good law. The case is styled, Forrester v. Southland Life Insurance Company.

The 1980, Texas Supreme Court case styled, Mays v. Massachusetts Mutual Life Insurance Company has stated that an insurance company may rescind a policy based on the insured’s misrepresentation, if the insurance company pleads and proves the following elements:

Life Insurance Claims Denial

April 12, 2015 | Mark S. Humphreys

Fort Worth life insurance lawyers need to read the 1983 case Gloria Cartusciello v. Allied Life Insurance Company of Texas. The case is from the Houston Court of Appeals [1st Dist.].

The facts are simple and virtually undisputed. Michael Cartusciello obtained a credit life insurance policy from the Allied after executing an application on March 7, 1978, which stated in pertinent parts as follows:

I hereby certify that I am in good health and gainfully employed and that my age is as stated above,… I certify that I have read and that the information provided hereinbefore to the best of my knowledge is true and I understand that any false statement, inaccuracy, or misrepresentation material to the risk, may be used by Allied Life Insurance Company of Texas to contest a claim. I have not been attended by a physician or been a patient in a hospital within the last 12 months preceding the date of this Application for any of the following impairments: Diseases of the (1) heart, (2) lungs or respiratory system, (3) stomach or digestive system, (4) brain or nervous system, or (5) cancer to any part of the body, except as follows:

There Must Be Intent To Deceive

April 5, 2015 | Mark S. Humphreys

Palo Pinto life insurance lawyers who handle life insurance claims that are denied need to read this case from the Houston Division of Texas Southern District. The case is styled, Kirk v. Kemper Investors Life Insurance Company. The case deals with misrepresentations made in an application for life insurance.

This case arises from a life insurance policy issued by Kemper Investors Life Insurance Company (“KILICO”) to Walta G. Kirk, on March 14, 2002. Ms. Kirk passed away on August 31, 2003, while the policy was in effect. Because her death occurred within two years of the policy’s issuance, KILICO conducted a routine investigation, which revealed that Ms. Kirk had been treated for chest pain, respiratory disorder, mental disorder, and uncontrolled high blood pressure. Ms. Kirk had denied that she had ever had or been treated for any of these conditions in her application for the KILICO life insurance policy. Based on these alleged misrepresentations, KILICO denied payment of any benefits on the policy.

The beneficiaries then filed this lawsuit. KILCO filed a motion for summary judgment saying stating Kirk misrepresented her medical conditions.

Misrepresentation – Knowledge of Agent

April 2, 2015 | Mark S. Humphreys

Dallas and Fort Worth Life insurance attorneys need to read this 2006, opinion from the United States District Court, Southern District of Texas, Houston Division. The style of the case is, Kirk v. Kemper Investors Life Insurance Company.

This case arises from a life insurance policy issued by Defendant Kemper Investors Life Insurance Company (“KILICO”) to Walta Kirk. Ms. Kirk passed away while the policy was in effect. Because her death occurred within two years of the policy’s issuance, KILICO conducted a routine investigation, which revealed that Ms. Kirk had been treated for chest pain, respiratory disorder, mental disorder, and uncontrolled high blood pressure. Ms. Kirk had denied that she had ever had or been treated for any of these conditions in her application for the KILICO life insurance policy. Based on these alleged misrepresentations, KILICO denied payment of any benefits on the policy.

An insurer’s actual knowledge of a misrepresentation by an insured will defeat a defense based upon misrepresentation. It is not enough, however, for a party seeking to collect insurance benefits to show that the insurer could have discovered the misrepresentations through due diligence or proper care. Rather, only actual knowledge on the part of the insurer will prevent the insurer from showing that it relied on a misrepresentation made by the insured.