Are You Really “In Good Hands” When It Comes To Your Life Insurance Company?

Stories about unfair and what can often be described as despicable behavior by insurance companies are not all that uncommon. A recent segment on the CBS news show 60 Minutes, titled “Not Paid”, exposed the unethical practice of many life insurance companies in which they purposely fail to contact life insurance beneficiaries in order to avoid paying them the life insurance benefits to which they are entitled. Go to cbsnews.com/news/60-minutes-life-insurance-investigation-lesley-stahl/ for the full story. As part of a settlement, approximately 25 life insurance companies, including well-known companies like MetLife and Prudential, agreed to pay more than $7.5 billion dollars in back death benefits. More than 35 other life insurance companies have not settled and remain under investigation. In many of these cases, the beneficiary was unaware they were named in the policy and entitled to benefits. While many of the unpaid benefits were in the $10,000.00 range (although there were several very large payouts that were not made) this was money the deceased purposely left to a loved one, family member, or friend and most certainly would have been of some benefit to the intended beneficiary. By paying the premiums on the policy the insured relied on their insurance company to do the right thing and contact the beneficiary upon notice of death. In these cases, the insurance company made no effort to locate the beneficiary; and instead chose to keep the funds. Unfortunately, this type of behavior is not atypical for many insurance companies whose actions strongly suggest that their own bottom line is more important than the rights of the insureds to whom they collected premiums and made promises.

The attorneys at Disability Insurance Law Group are extremely familiar with the unreasonable tactics employed by life insurance companies and have a wealth of experience in competently handling claims against these carriers. We have been featured on Good Morning America’s “GMA Gets Answers” several times to discuss how we have helped our clients successfully prevail against insurance companies. See /Good-Morning-America.shtml. In addition to the scheme exposed on the 60 Minutes segment, life insurance carriers find numerous other ways to unfairly deny coverage and/or avoid paying benefits. To add insult to injury, these claims often arise during a very sad and trying time; thus many beneficiaries simply do not have the desire, time, or energy to fight. One often employed denial tactic is for an insurance company to deny coverage after the insured has died and the beneficiary contacts them to pay the life benefit owed under the policy on the basis that the insured failed to properly or honestly complete the application for the policy by failing to disclose a known injury or illness.  The carrier claims that had they known of this undisclosed medical problem they would have never issued the policy or would have excluded certain causes of death from coverage. Many of these insurance applications have vaguely worded questions and do not provide the opportunity for a proposed insured to include every ache and pain they have experienced. Additionally, what the insurance company, in hindsight, considers an undisclosed “illness” or “injury” is often nothing more than a minor ailment about which the insured complained to his or her doctor at some point and that subsequently resolved. To most people, sporadic episodes of back pain or a cold that caused shortness of breath does not rise to the level of being an illness or injury that would be responsive to the questions on the application to obtain a life insurance policy. Nonetheless, many insurance carriers use such medical history to deny benefits. Typically upon the beneficiary’s filing of a claim for benefits, the insurance representative will obtain years and years of the deceased insured’s past medical records and review them for any sign of a “problem” that they can then use to justify not paying the life insurance benefit. In many instances the carrier’s alleged reason for denying payment is insufficient and unreasonable. Our attorneys work with our clients and the insurance companies to clarify the alleged misrepresentations and make sure all benefits due and owing to the beneficiary are paid.

Knowing your rights as well as the insurance company’s obligations and limitations is extremely important. Thus, it is wise to seek advice prior to filing a claim, when appealing a denial or decision, or accepting a settlement offer. If you have questions about a an insurance company or your right to insurance benefits and/or wish to discuss your insurance claim with one of our attorneys, please do not hesitate to contact us online, call 954-989-9000 or explore our disability insurance website.