It happens all the time – an unsuspecting consumer obtains a life insurance policy with the intention that a loved one will be taken care of financially should they pass away unexpectedly. They faithfully pay premiums on those policies for years or even decades. When they finally do pass away, their policy beneficiaries are often shocked to learn that the insurance company is refusing to pay a death benefit.
In truth, however, insurance companies do this all the time. After all, they’re not in business to pay out exorbitant claims. To the contrary, they are in business to generate profits. The easiest way for a life insurance company to do this is to systematically collect high premiums from policyholders and then find an excuse not to pay out on the policy when the time comes. In fact, life insurance companies employ legions of attorneys who get paid a lot of money to generate those excuses.
The impact of these claim denials can be devastating for families. On top of dealing with the grief and despair that accompanies the death of a loved one, survivors can suddenly find themselves steeped in financial insecurity they hadn’t planned to face. To add injury to insult, there is a severe imbalance of power as between the intended beneficiary and the insurance company representatives (often referred to as “adjusters”).
The adjuster deals with lengthy and complex life insurance policies day in and day out. They know policy language like the back of their hand and they often have a good grasp of legal concepts they deploy to deny claims. The beneficiary, on the other hand, may have no prior experience with insurance policy language or the legal intricacies involved in claim denials.
That’s where we come in. As attorneys who specialize in contesting wrongful denials of life insurance claims, we see insurers try to take advantage of unexpecting beneficiaries all the time. Once we are retained to fight on behalf of the beneficiaries, however, things typically change dramatically. We know all of the insurance company tricks. We know their intimidation tactics. They don’t dissuade us in the least.
This article explores the facts of a classic life wrongful claim denial case. While this case is just one of a million examples of wrongful denials by life insurance companies, we hope it illustrates just how helpful it can be for a beneficiary to retain an attorney specializing in these disputes.
An unexpected death
The case involved a man named George. George was an ice-sculptor who lived in Arizona. He was well known in his community and was called on to create ice sculptures for nearly every major event within the city.
One July, George was commissioned to create three large ice sculptures for the opening of a new golf club outside Tucson. Given that it was the middle of summer, George decided it would be best to create the sculptures on site rather than building them in his studio and then schlepping them across town in 110-degree heat. Conveniently, the golf club had a large walk-in freezer they said George could use for creating the three sculptures.
George started working at 5:00 am inside the freezer. Known by colleagues as someone who could withstand extreme temperatures, none of his assistants were shocked when George stepped into the freezer wearing nothing but a t-shirt and shorts. They started to become a little concerned, however, when George worked away in the freezer for seven straight hours without ever putting on additional layers.
At around noon, George finally came out of the freezer. He proceeded directly outside to see where the sculptures were going to be set up for that evening’s festivities. The temperature outside at that hour was 118 degrees.
The shock of going from hours at 33 degrees to 118 degrees was simply too much for George’s body. He collapsed and was rushed to the hospital by ambulance shortly thereafter. Doctors could never stabilize his body temperature and George passed within a matter of days.
A shocking life insurance claim denial
At the time of his death, George had a life insurance policy worth $100,000. It also had an accidental death rider worth $300,000. The policy named George’s wife Susan as the sole beneficiary. When Susan submitted a claim against the policy a few weeks after George died, she had no doubt that the insurer would pay out under the policy and the accidental death rider.
That’s not what happened, however. Instead, one month after submitted her claim, Susan received a claim denial letter in the mail. The insurance company claimed that George’s decision to walk directly from the freezer to the extreme heat was an act of suicide and therefore excluded by express policy language. The company claimed that it was common knowledge that such a quick transition could lead to death and that since George regularly worked in freezing temperatures, he was surely aware of this.
Fortunately, a friend referred Susan to an attorney specializing in the wrongful denial of life insurance claims. The attorney took the insurer to court and presented evidence that: (a) due to the nature of his work, George’s body was used to going from cold to hot and back again; (b) George had no history of depression or suicidal thoughts; and (c) just before his death, George had booked a vacation to Italy for he and Susan the following year (evidence that he was looking forward to the future).
The court ultimately decided that there was no credible evidence that George intended to cause his own death. Consequently, the insurance company was ordered to pay the full policy amount, plus interest. This allowed Susan to avoid financial hardship as George had intended.
Life insurance companies issue bogus claim denials like this all the time. If you or someone you love has received a claim denial letter from a life insurer, please call us today for a free consultation. We’re here to help you get the benefit you deserve.