Category: Life Insurance Claims

Your Guide to Life Insurance Beneficiary Disputes

What happens when multiple people claim they each are entitled to life insurance benefits after the death of the insured? How does an insurance company determine who is entitled to the benefits? If you believe you are the rightful beneficiary to a life insurance policy, you will likely need the expertise of a trusted life insurance attorney. Keep reading to find out about the different types of life insurance disputes.

Types of Life Insurance Disputes

Claims by former spouses

A common beneficiary dispute arises when an ex-spouse remains the named beneficiary on a life insurance policy. This may occur if the policyholder neglects to change the beneficiary after a divorce, or if the ex-spouse’s designation as beneficiary was part of the divorce decree. Depending on the type of policy and the state in which the policy was issued, an ex-spouse may not be entitled to the benefits despite being named beneficiary.

Policies Governed by State Law

1. Revocation on Divorce statues

Life insurance beneficiary rules after a divorce vary by state. About half of all states maintain a “revocation-on-divorce” statute, which provides that divorce effectively removes an ex-spouse as beneficiary. These statutes may be overridden if:

  • the insured re-designates their ex-spouse as beneficiary, or;
  • if the divorce decree states that an ex-spouse will remain the beneficiary.

This occurs because life insurance is occasionally used as a form of alimony or as security for any children of the marriage.

We recently got our ex-wife beneficiary client paid on her claim in Texas, a revocation-on-divorce state, when we were able to show that the insured explicitly re-designated her as beneficiary following the entrance of the divorce decree.

2. Community Property States

If no revocation-on-divorce statue exists in your jurisdiction, a current spouse may still recover if the policy was issued in a community property state. A former spouse might also recover under certain circumstances!

In community property states, all property acquired during the marriage is owned equally by both spouses – including life insurance. Under a term life policy, a current spouse is often entitled to one-half of the death benefit because the entire policy is considered community property. Under a whole life policy, the current spouse is entitled to benefits according to the percentage of premiums paid with community funds.

If the policy premiums were paid with community funds with a current or former spouse, there is an argument that he or she is entitled to half of the death benefit even if not named as beneficiary. For example, in a case where the insured named his son as sole beneficiary, we got our client paid half of the death benefit by arguing that she was with the insured for 12 years, lived with him for eight years, and was married to him for the last four years prior to his death, and premiums were paid from their joint account. Keep in mind that while this is a real-life situation, we cannot guarantee the same results in any other matter.

Policies under Federal ERISA Law

If the insured had a policy through their employer, the policy is governed by the federal Employee Retirement and Income Security Act of 1974 (ERISA) which states that the most recent validly-named beneficiary is the rightful claimant. This means that under ERISA, an ex-spouse who remains the designated beneficiary on a policy will receive the proceeds, regardless of the insured’s intent. However, if the insured tried to change their beneficiary designation at any point, other individuals may still have a claim on the policy.

If the insured’s policy originated under their employer and was converted to an individual policy, the rules governing beneficiary disputes vary by jurisdiction. Also, ERISA trumps or supercedes state law, so where there is a conflict ERISA will control. This happened in a case where we were able to get an ex-spouse paid in full on her claim in a revocation-on-divorce state, because ERISA controlled.

If you believe you should be a beneficiary of a policy governed by ERISA, contact a beneficiary attorney at the Boonswang Law Firm to find out if you have a claim.

Competing claims by siblings, step-siblings, or others

Another common beneficiary dispute occurs when the insured has children from multiple marriages, or marries an individual with children from another marriage. Often, an insured parent may intend to make all his or her children beneficiaries, but neglects to add children to the policy as time passes. Do these unnamed children have a claim? Probably! Also, where an insured designated “all children of the insured” rather than naming them each, an adopted child (our client) was equally entitled to the death benefit.

State laws vary, but most states will only allow a validly named beneficiary to collect life insurance proceeds. Someone other than the named beneficiary could have a claim, but only if there is clear evidence of the insured’s intention to name another beneficiary. Evidence of the insured’s intention may exist if, for example, the insured completed and mailed a beneficiary change form, but forgot to sign it. Or, if the insured completed a beneficiary change form and mailed it, and having never received notice that it was completed incorrectly, assumed it was in force.  This happened in a recent case where we were able to get his intended beneficiary paid in full.

How do insurance companies handle competing claims?

When different individuals or parties claim the right to receive the same benefits, how does an insurance company determine who is entitled to the proceeds?

If more than one party claims to be the legal beneficiary of a policy, a life insurance company will likely bring an interpleader action. This means that an insurance company will deposit the policy benefits into an account controlled by the court. If multiple parties make claims, you will need a life insurance lawyer because interpleader actions are legal actions that the court decides. Once multiple claims have been made, an insurance company will not likely make a determination about beneficiary disputes.

Interpleader actions can be resolved through  the following ways:

  • litigation (the parties will make their cases and the court will decide who is the rightful beneficiary), or;
  • settlement (the parties agree upon the amounts to which they are each entitled with the help of their attorney).

After the dispute is resolved, the life insurance benefits are distributed according to what the court or the parties decided.

How to respond to life insurance disputes

The best way to avoid a beneficiary dispute is to ensure that you and your loved ones regularly review your life insurance policy and your beneficiary designations. You should keep in touch with your issuing agent and establish a plan to periodically review your policy. Additionally, you should be sure to review your policies after important events, such as marriages, the birth of a child, divorces, or job changes.

If you are currently experiencing a beneficiary dispute, you will need a trusted life insurance lawyer. Beneficiary disputes are almost always a legal matter so it is important that you receive legal assistance as soon as possible from a lawyer for life insurance claims. Top-rated life insurance attorney Chad Boonswang and his associates have more than 25 years of experience achieving successful resolutions in beneficiary disputes. Contact the Boonswang Law Firm to learn about your potential for recovery.

 

life insurance lawyer

What To Do When a Life Insurance Claim is Denied Due to Lapse

Lapse is one of the most common reasons life insurance claims are denied.

When a life insurance policy “lapses,” it means that the policyholder or designated payor has not paid one or more required premium payments. Premium payments are required to keep a life insurance policy in force. Policies may require a monthly, semi-annual, or annual payment of a premium.

Most, but not all, states require notices with specific information (designated via state statute) to be sent to the designated payor of the policy when a premium has been missed and a policy is in danger of lapsing.  Failure to fulfill these payments can lead to termination of the policy entirely.

Beneficiaries, take note – if the life insurance company has not complied with the notice requirements of the state, the policy may still be enforced, even if years have passed since the last payment was made. For example, one of our client’s claim was denied ostensibly due to lapse, yet we were able to get her paid. The insured let the insurance company know that he was no longer receiving monthly bills for the premium, yet he continued to make monthly payments. His last premium payment was just short of the amount required, and he died one month later. His beneficiary’s claim was denied. But because we could argue that the insurance company failed to send the required payment, lapse, and termination notices to the insured, it had to pay our client.

Keep in mind that this case study is true, however, we cannot guarantee similar results in any other matter.

Lapse when the Insured is Ill

A common scenario that leads to a policy lapsing is when the insured falls seriously ill or is facing a decline in mental health.  These individuals often miss their premium payments due to their illness.  Courts have been willing to take this scenario into account, especially if the insured has loyally paid their premium up until the time that he fell ill.

The Boonswang Law Firm has extensive experience dealing with these scenarios and have found tremendous success with these illness-related lapse cases. In one such case, the insured paid premiums for 34 years and was diagnosed with dementia in June 2018. The insurance company issued notice in September 2018 of a premium payment due in October, which the wife believed she paid. When the insured dies and the wife’s claim was denied, we used the payment history to show that policy lapse did not occur until six days after the death of the insured, and she was paid the death benefit. Again, these situations are very fact-specific and we cannot guarantee this result in your matter.

Reinstatement of an Insurance Policy After Lapse

If your policy lapses, there can also be an option to apply for reinstatement of the policy.  When one applies for reinstatement, however, the insurance company gets the opportunity to review your most recent medical records to reconsider whether they would agree to insure you.  If your application for reinstatement is accepted, this also resets your two-year contestability period.  Thus, if the insured dies within two (2) years of the effective date of the reinstated policy, the insurance company may contest or deny payment of the death benefit based on any misrepresentation on the reinstatement application.

Life Insurance Claims Within the Grace Period Will Be Paid

Since life insurance policy proceeds are assets upon which many families rely after a loved one has passed on, there are laws in place mandating a grace period when a lapse occurs.  Once a premium payment is missed, the grace period begins.  Therefore, if the insured dies within the grace period (usually 30 days), the insurer may still be required to pay the death benefit.  The grace period also allows time for someone who missed a payment for financial, health, or other reasons to catch up and make the payment before the policy lapses.  Once the grace period is over, however, the policy is considered lapsed and the insurance company will deny payment of the death benefit.

One of our clients was the beneficiary of a policy and her claim was denied due to lapse.  However, the insured had been only three days late on the premium payment, and died three days after that – well within the grace period.  We got our client paid.

In another case we handled, the insured fell into a coma and no one in the family knew of the life insurance policy until they received a notice claiming to be a Lapse Notice, informing of a past-due premium, that the grace period had expired, and that the policy lapsed. There was no information in the Notice indicating when the policy had been paid through, or when the grace period began or ended. Insurance companies are required to provide a 60 day grace period, not concurrent with any time paid coverage is in effect, and must mail a notice of pending lapse to the insured at least 30 days before  the effective date of termination of the policy. We argued that since this insurance company could present no evidence that it had complied with these requirements, the policy must remain in effect, and our client was paid.

Again, keep in mind that although these are real results for real clients, we cannot guarantee the result of any other matter.

If Your Claim Has Been Denied Due to Lapse or Termination, You Need an Attorney to Fight for You

If you have not been paid due to lapse of the life insurance policy, you should contact the national life insurance lawyers at The Boonswang Law Firm.  The problem could be lack of notice – many states require insurance companies to notify policyowners that they have missed one or more premium payments.  If an insurance company has not followed the lapse notice laws of your state, you may still be eligible to receive the policy’s benefits.

Our attorneys are very well-versed in analyzing the lapse notice laws of states throughout the country.  Our concentration in this area has helped us hold insurance companies accountable when they have not complied with the law or when they have been negligent in their accounting or administration of the policy, bringing countless families the financial security that they need by obtaining death benefits that are rightfully theirs.

Insurance questionnaire

What happens when there is false information on a life insurance application?

What to do when an applicant for an individual health policy failed to complete the application properly

What happens when a life insurance application contains bad information? Wrong or false information can invalidate a life insurance policy. An insurance company can contest a life insurance contract due to application fraud.  Even when a mistake is unintentional, any misrepresentation or omission on a life insurance application can make it difficult for your beneficiary to recover the death benefits you want them to receive.

When applying for life insurance, be as thorough and accurate as possible on your application. Accuracy will help ensure that your beneficiary will recover the benefits for which you are paying. And if your application is prepared by your life insurance agent, review it carefully before signing.  If your application contains misrepresentation of material facts due to your agent’s negligence, that can also result in your claim being denied. Also, agent lies can void the policy. Review the application carefully before signing it and submitting it to the insurance company.

What happens if you lie on your life insurance policy application?

Your beneficiaries will likely have trouble getting their claims paid. Any misrepresentation on a life insurance application, whether intentional or unintentional, by you or by your agent puts the life insurance benefit at risk.

I am a beneficiary – Can I claim death benefits if information on the life insurance application was wrong?

Yes, you should always submit a claim for benefits. If you are a beneficiary, how are you to know that your loved one’s application contained a misstatement before your claim is denied?

If you have already submitted a claim and got your life insurance claim denied, you may still be able to recover with the help of an experienced life insurance lawyer at the Boonswang Law Firm. Take a look at some of the following examples of wrong information on the application – in our case studies, you will see that our client’s claim was initially denied, then we got our client paid. While these are all real-life situations, keep in mind that we cannot guarantee that the result of your matter will be the same.

Wrong Age on Application

An application with an incorrect age can make it difficult to recover benefits.  Many insurance policies contain a “misstatement of age provision”. A misstatement of age clause states that the insurance company will only pay the amount of benefits that would have been purchased for the premium if the correct age had been provided.

In other words, a beneficiary’s claim will pay out the amount of money that it would have paid out if your loved one’s age was accurate. This payout will certainly be less than expected under the current policy.

Even if the misstatement was accidental, an insurance company is likely to reduce benefits to match the true age of the insured. Insurers also reduce benefits if someone other than the insured (such as the agent) is to blame for the misstatement.

Case Study #1: Having interviewed the insured and the insured having answered all questions honestly, the insurance agent prepared an application and the insured signed it without reviewing it. It set forth her age as 10 years younger than she said it was. Because the agent prepared the application, the agent’s knowledge was imputed to the company and no fraudulent intent could be shown of the insured.  We got our client’s claim paid.

Inaccurate Income Listed

When applying for life insurance, applicants may be tempted to stretch the truth in their favor. Lying on a life insurance application is always risky:  in most states, an insurer can deny a claim even if the misrepresentation and the cause of death are completely unrelated.

Overstating your income, or even estimating your income, will increase the risk that a claim is denied — even if the insured never missed a premium payment. If your claim is underpaid or denied because of inaccurate income, you will likely require an experienced law firm like Boonswang Law to help you recover.

Inaccurate Weight Listed

Insurance companies rely on weight to decide your rate class and premiums.  Because weight is an important factor for all insurance companies, an inaccurate weight will increase the chance that your claim will be delayed or denied.  Insurance companies will always know if you or your loved one’s weight is inaccurate. Insurers receive an accurate report from your life insurance medical exam, and may even look at your health history to verify your weight.

Life insurance height and weight charts are available online to understand what category into which an individual is likely to fall based on their BMI.  Obese individuals are still eligible for life insurance and are likely to find coverage that meets their needs without sacrificing accuracy on an application.

Case study #2: Our client’s claim was denied for alleged incorrectly-answered questions on the insured life insurance application. An insurer can only rescind a policy if it can show that an untrue statement or omission of material fact was made with the intent to deceive, and that the misrepresentation regarded the cause of death. This insurer could show neither, so we were able to get our client paid.

Missing Information on Insurance Application        

When an applicant for an individual health policy fails to complete the application properly, insurance companies are more likely to increase premiums, reduce benefit payments, or deny benefits outright. The same happens if and agent fills an application out incorrectly.

Case Study #3: The insured disclosed that she was taking Nexium 40mg for acid reflux. Her beneficiary’s email was denied because of alleged material misrepresentation in that the insured failed to disclose that she was diagnosed with dyspepsia, gastroesophageal reflux disease with esophagitis, and related afflictions. Under Georgia law, the insurance company was on “constructive notice” that the insured was more seriously ill and should have inquired further when the application was received.  We got the beneficiary paid!

Application omissions are particularly risky if an insurer discovers an omission within the two-year contestability period.  If the insured dies within two (2) years of policy approval, an insurer can avoid paying benefits if it can prove that the cause of death conflicts with the approved application.  Even when the contestability period has passed, an insurer may still avoid payment by showing that the applicant misrepresented an aspect of his or her health that may have affected approval.  For example, if the insured dies of a heart attack within the contestability period, the insurer may deny benefits if the insured failed to report a history of high cholesterol on the application.

The Life Insurance Agent Was Negligent or Purposefully Lied on the Application

This happens! Read on for some real-life Case Studies about our clients.

Case study#4: The insured disclosed her heart complications and recent hospitalization to her insurance agent, who in turn neglected to disclose that on her life insurance application. Beneficiary’s claim denied. Because the agent’s knowledge is imputed to the life insurance company, we got the beneficiary’s claim paid.

Case study #5: The insured told his insurance agent that while he used to smoke, he quit a few months ago. The agent marked the question about smoking “no” and did not record that the insured had COPD and Hepatitis C. Claim denied. Again, the agent’s knowledge was imputed to the insurance company and we got the beneficiary’s claim paid.

Case study #6: The insured disclosed high blood pressure and hypertension to the insurance agent but the agent did not record the hypertension on the application. Again, the agent’s knowledge was imputed to company. Failure to disclose a material fact on an application is grounds for voiding the insurance contract only if fraudulent. Because the company could not show that the insured’s intent was fraudulent, we got the claim denial overturned and our client was paid.

Case study #7: The agent filled out the life insurance application for the insured, who was blind and had diabetes.  The agent failed to disclose these on the application, however, and the insured signed it. Because the insured could not see the application, no fraudulent intent could be proven. We got our client’s claim paid.

Life Insurance Lawyers Recover for Misrepresentation on Application

If you believe that you or a loved one may have inaccurate information on an application for life insurance, you should contact the insurance company immediately to submit an amended application. You don’t want the beneficiary’s claim denied due to life insurance application mistake.

A life insurance company normally has 2 years to contest information on an application. If you are a beneficiary and have already been denied benefits based on an alleged misrepresentation or fraud regarding the information on the application, contact the Boonswang Law Firm to discuss the steps that we can take together to ensure you get paid.

woman sitting on park bench

Can You Collect Life Insurance if Someone Commits Suicide

Will a life insurance policy pay out for suicidal death? Perhaps.

Whether a beneficiary can collect life insurance if the insured kills themselves will depend upon the timing of the death relative to the purchase of the life insurance policy, the policy exclusions, and whether the death was suicidal or accidental.

If your life insurance claim was denied after the suicide of the insured, give us a call. Your initial case evaluation is free of charge, and our life insurance beneficiary lawyers only take cases on a contingency basis, which means we do not get paid unless you collect your life insurance claim. Don’t take no for an answer! Let us fight for you!

If you or someone you know is struggling with thoughts of suicide, call the National Suicide Prevention Hotline at 1-800-273-8255 to access their national network of local crisis centers that provide free and confidential emotional support to people in suicidal crisis or emotional distress 24 hours a day, 7 days a week.

Life Insurance Companies Will Try to Avoid Paying Claims on Suicide

Many people believe that if an insured commits suicide, claims for life insurance death benefits are automatically denied and cannot be contested or appealed. This is not necessarily the case.

As with many issues involving the law, “it depends.”  Whether life insurance companies will pay out death benefits after the insured allegedly commits suicide depends on three things:

  1. how long the insured had the life insurance policy before they passed;
  2. the specific terms of the life insurance policy itself; and
  3. whether the death was accidental and only looked like suicide at first glance.

Your Claim Will Be Denied if the Suicide was within the Contestability Period

The amount of time that elapses between when the insured purchased a life insurance policy and when they passed is extremely important in determining whether their policy will be paid to their beneficiaries.

The first two years after the insured purchases the policy is called the contestability period, within which the life insurance company can deny claims for a wide range of reasons, including suicide. Life insurance companies are permitted to deny claims when the insured dies due to suicide in order to dissuade those who are considering committing suicide from purchasing a policy shortly beforehand, to provide a windfall for their beneficiary.

To determine whether your claim was properly denied due to suicide within the contestability period, you should contact our life insurance attorneys for your free case evaluation. We can help you determine whether or not you are entitled to the death benefits and we will fight the life insurance company on your behalf if you are.

A Life Insurance Exclusion May Exclude Coverage for Suicidal Death

If the insured committed suicide after the contestability period expired, a life insurance “exclusion” may exclude death by suicide from coverage under the policy, and your claim may still be denied.

Again, a suicide “exclusion” is meant to keep people from buying a policy simply to leave money to their family after a suicide. “Exclusions” are pre-stated reasons that the life insurance company will not pay a claim for benefits and are found in the text of the life insurance policy itself. A typical suicide exclusion will state that no death benefit will be paid if the insured commits suicide or if suicide is the cause of death.

This exclusion is also be called a “suicide provision,” and you should always check a life insurance policy for a suicide provision before purchasing one. A suicide provision addresses the terms and conditions of a payout as well as the exclusion due to death by suicide specifically.

What Looks Like Suicide May Have Been an Accident that is Covered by Life Insurance

If there is any possibility the insured die from suicide, the life insurance company will deny your claim for death benefits. However, many deaths that look like suicide at first glance occur accidentally.

Common accidental causes of death that can look like suicide at first include:

  • Prescription drug overdose
  • Illicit drug overdose
  • Alcohol poisoning
  • Hanging
  • Falling
  • Fatal single-vehicle accident
  • Drowning

The coroner’s report and death certificate must list the cause of death. If the cause of death is listed as something other than suicide, and your life insurance claim was denied due to suicide, call us. We can help you get paid.

If the cause of death is listed as suicide, but you have reason to believe that the insured did not intend to commit suicide, call us. We can help you get your claim paid as the insured intended.

If you or someone you know is struggling with alcohol or drug abuse call the Substance Abuse and Mental Health Services Administration (SAMHSA) hotline at 1-800-662-HELP (4357) for free and confidential help, 24 hours a day.

If you or someone you know is struggling with thoughts of suicide, call the National Suicide Prevention Hotline at 1-800-273-8255 to access their national network of local crisis centers that provide free and confidential emotional support to people in suicidal crisis or emotional distress 24 hours a day, 7 days a week.

Our Life Insurance Lawyers Fight Claim Denials Due to Suicide

If your claim for benefits was denied due to suicide, contact our life insurance lawyers. We will review the policy to let you know if the contestability period applies or if a suicide provision was the reason for your denial. It may be that the death of the insured was accidental and not suicide. If there is any way you can still secure a payout, we will find it.

If no suicide provision in the policy excludes suicide from coverage, and the death occurs after the two-year contestability period, then the life insurance company may pay the benefit even if the cause of death is suicide. If we can show that the cause of death was, in fact, accidental and not suicide, the life insurance company may pay.

Our life insurance lawyers can help you get the payout you deserve, and we do not collect any fees unless and until we do. Call us for your free case evaluation, and let us fight for you!

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Can Felons and Ex-Convicts Get Life Insurance?

Do insurance companies cover felons and convicts?

Can you get life insurance if you are a felon? Can you get life insurance with a criminal record?

When deciding whether to provide a person with life insurance, life insurance companies weigh the risks associated with that person after they’ve done a background check.  The riskier the person, the less likely the insurance company will provide a policy.

The risks associated with insuring someone include, for example, that person’s medical history.  If someone has been diagnosed with aggressive skin cancer, a life insurance company may choose not to provide this person with coverage because, should the person die in a short period of time, the insurance company will have to pay out the policy sooner than they would like and issuing the policy would be a losing financial proposition.

Insurance companies also examine other risks, such as a person’s job (is the applicant a race-car driver or a telemarketer?), their recreational activities (do they often deep-sea dive or sky-dive?), and even the person’s criminal record.

Can convicted felons get life insurance? Well, if you have a criminal record, insurance companies will likely view you as leading a “high-risk lifestyle” because they believe you are someone prone to making bad choices.

Can felons get life insurance?

Sometimes. Having a criminal record does not automatically bar you from getting life insurance.  (There are some exceptions to this statement explained below in #3.)  When deciding whether to insure a person with a criminal history, insurance companies often consider the following:

  • Whether you were convicted of a felony. This post discusses a person’s ability to obtain life insurance after they have been convicted of a felony.  If you have only been charged with a felony, or you have been convicted of a misdemeanor, this post may not answer your questions.  Contact the Boonswang Law Firm and we will be happy to discuss your specific situation.
  • Whether you were incarcerated. Incarceration is a traumatic experience in and of itself, so it inherently takes a toll on a person’s mental and emotional well-being.  Aside from the psychological trauma that incarceration can have on a person, it can have physical impacts on people as well.  While in prison, people are at a higher risk of contracting diseases that can then lead to untimely deaths down the road.  Additionally, drug use is sometimes associated with incarceration and may also lead to premature death.  Whether you were incarcerated for your crimes, how long you were incarcerated, and how long ago you served your time are all very important information to insurance companies.
  • The nature of your crime. The nature and charge of your conviction is important for two (2) reasons.  First, insurance companies use the nature of your crime to determine how risky your behavior has been in the past.  If you have been convicted of murder, rape, drug trafficking, kidnapping, child molestation, and/or conspiracy to commit any of those crimes, you will likely be barred from obtaining life insurance.  Second, life insurance companies want to know the nature of your criminal conviction because some convictions have higher recidivism rates than others.  Essentially, the company will use this information to determine how likely it is that you will return to prison for another felony conviction.
  • Whether there was a probation period. Under normal circumstances, you will be unable to get life insurance while on probation.  Life insurance companies normally require a period of five (5) years to pass from the date that the probation ended until the date that they will agree to provide a life insurance policy to an applicant.  The more time that has elapsed since your criminal activity, the better it is for your life insurance application.
  • Whether you have changed your life around. One good tip is to write the life insurance company a cover letter in which you explain exactly what happened and specifically how you have improved your life since your felony conviction.  Taking responsibility for your decisions and showing that you now have some form of steady employment, some education, and a connection to service and your community will all increase your chances of getting approved for life insurance.  When it is time to submit a claim, the Boonswang Law Firm can help ensure that your beneficiary receives payment of the death benefit.

Philadelphia’s Life Insurance Lawyers, getting life insurance for convicted felons.

At the Boonswang Law Firm, we are here to help you with all your life insurance questions.  If your loved one had a criminal conviction and you have questions regarding life insurance for felons or accidental death and dismemberment policies for felons, contact the Boonswang Law Firm and we are happy to discuss any of your concerns.

 

 

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What Happens When Your Employer Terminates Your Group Life Insurance Policy?

What happens to life insurance when you leave a job? Does your employer end coverage when employment is terminated?

Not necessarily and not without notice. Read on to find out what your rights and responsibilities are regarding employer life insurance after retirement, or when you are fired, quit, or leave employment due to disability.

How Does Employee Group Life Insurance Work?

When an employer offers life insurance to their employees, they are required to meet certain standards laid out by The Employee Retirement Income Security Act of 1974 (also known as “ERISA”).  This is a federal law with which companies throughout the United States must comply.

Some of ERISA’s most basic functions include a requirement that participants are given information about their plan’s features and funding, the establishment of duties that the plan’s fiduciaries must uphold, and the ability for participants to seek remedies and access the federal courts if necessary.

According to the Bureau of Labor Statistics, 59% of non-government workers have access to employer-provided life insurance.

An employer may decide to stop offering coverage to their employees for a variety of reasons.  It is also possible that you may no longer be eligible for coverage if you leave your job.

In either situation, however, there are steps that your employer is required to follow under federal law once your group life insurance policy has been terminated.

What happens when an employee is terminated, under ERISA?

There are specific federal rules regarding what happens to group life insurance after leaving a job.

1. Employers Have To Notify You of Policy Changes

If an employer cancels the life insurance policy of an employee, the employee must be notified.  The courts impose additional duties on employers to notify the employee of their option to convert the group policy to an individual policy.

In the 8th Circuit (which is comprised of Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota), for example, the employer, as the “fiduciary”, must communicate material facts affecting the interests of beneficiaries regardless of whether the insured or beneficiary asks for that information.  Fink v. Dakotacare, 324 F.3d 685 (8th Cir. 2003).

Additionally, the fiduciary’s duty includes a duty not to misinform, as well as an affirmative duty to inform when they know that silence might be harmful.  Shea v. Esensten, 107 F.3d 625 (8th Cir. 1997).  This would require an employer to inform an employee of their option to convert their group life insurance policy to an individual policy.

2. You Have A Short Window of Time to Convert Insurance Coverage

After notifying you of your option to convert, there is a period of time in which the company must allow you to make the decision about whether you would like to convert your policy.

For example, the Insurance Department of Maryland notes that “the notice you receive states the deadline for making the selection of an individual policy. The insurance company must allow you at least 31 days after your group coverage ends in which to make a decision.”

If you decide to convert to an individual policy, you personally (not your employer) will be entering into a new contract with the insurance company.  Thus, it is important to keep in mind that you will become responsible for paying the premiums of your individual policy directly to the insurance company.

ERISA Claims Can Get Your Death Benefits Paid

In situations where an ERISA-related problem has occurred, do not delay in seeking our advice.  There is a short time-frame in which you may bring an ERISA claim, as well as certain other time requirements for notices of appeals and the like.

Even if years have passed since you have been denied your life insurance benefits, however, not all hope is lost.  By consulting our attorneys, we may uncover new information regarding your claim that essentially “resets the clock” on that time limit.

It is rather common for employers to fail to meet their duties to employees regarding their group life insurance policies.  The Boonswang Law Firm has vast experience in this area. For example, recently we got our client beneficiary paid when the insured was approved for long-term disability benefits, and employment was terminated. The employer failed to provide the notices required by ERISA and insurance lapsed. We had another no-notice case where the employer agreed that they failed to provide the required notice, and approved a posthumous enrollment application for life insurance. Our client was paid.

Did something like this happen in your case?  Let us find out. While we were successful in these particular ERISA cases and in many, many others, we cannot guarantee a similar result in any other matter.

Your Life Insurance Lawyers for ERISA Claims and Employer Life Insurance

Our lawyers at The Boonswang Law Firm have had a great deal of success in handling life insurance policies governed by ERISA.  We have had outstanding results in advocating for our clients against their former employers and life insurance companies.

 

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Does Life Insurance Pay for Overseas Deaths?

Was Your Foreign Death Life Insurance Claim Denied? 

Life insurance usually covers death while traveling internationally, but there are circumstances when it may not.

This article will explore the potential problems beneficiaries may encounter when filing a claim for death benefits if the insured happens to die abroad, how to solve those problems, what happens to life insurance if the insured moves abroad, and the instances when life insurance will not cover foreign death.

If you are a beneficiary and your claim for life insurance death benefits was denied or is delayed because the insured died while traveling overseas, call our life insurance claim lawyers. We can help you get paid.

Foreign Death Claims are Often Denied or Delayed

A “foreign death claim” occurs when an insured dies outside of the U.S.

If you fail to inform your insurance company of your foreign destination, the length of time you will be there, and what activities you will engage in while there, your beneficiaries’ claims may be denied due to your misrepresentation. At the very least, your beneficiaries’ claims will be delayed due to the life insurance company’s need to investigate.

Common Reasons a Foreign Death Life Insurance Claim is Denied

It is Challenging to Obtain the Required Proof of Death

If a life insurance policy has been in place for at least two (2) years, the insured should be covered if they pass away abroad. But before a life insurance claim is paid to the beneficiary of the policy, the life insurance company must obtain satisfactory proof of the insured’s death.

If the person died in the United States, a death certificate will suffice. Providing proof of death becomes much more difficult, however, when the person dies overseas. Customary practices, resources, and technology all vary greatly from country to country, which can preclude a country from recording a death in the same way that we do in the United States.

The Insurance Company Will Delay Paying Death Benefits to Investigate

It is common for insurance companies to ask repeatedly for more documentation or to delay paying a claim for death benefits because ostensibly they are investigating the foreign death. 

One case our life insurance lawyers handled arose when the insured died in Ghana on a business trip. A two-year “investigation” commenced into his death, meaning, payment of death benefits to the beneficiary was delayed for two years. Because the insurer did not act in good faith in their “investigation,” in that they made no attempt to verify any of the many documents our client submitted, we got our client paid, at last – with interest!

Our Life Insurance Attorneys Will Help You Get Paid if Your Foreign Death Claim Was Denied 

When life insurance companies are given foreign proofs-of-death or death certificates that look unusual compared to the U.S.’s death recording practices, they often allege that they are being victimized by people faking their deaths and will likely launch their own investigations, delaying payout. They may also deny foreign death claims due to alleged misrepresentation, suicide, or suspicious death. 

 

If your foreign death claim was denied or your foreign death claim payout is delayed, we can help you. Call us for your free case evaluation. Our experienced life insurance beneficiary lawyers work on a contingency basis, meaning, there is no cost to you, and we do not get paid unless you do. Don’t take no for an answer! 

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What Happens When a Life Insurance Policy Lapses?

What does it mean for a policy to lapse?

When a life insurance policy “lapses,” it means that the policyholder or designated payor has not paid one or more required premium payments.  Premium payments are required to keep a life insurance policy in force.  Policies may require a monthly, semi-annual, or annual payment of a premium.

Most, but not all, states require notices with specific information (designated via state statute) to be sent to the designated payor of the policy when a premium has been missed and a policy is in danger of lapsing.  Failure to fulfill these payments can lead to termination of the policy entirely.  If the company has not complied with the notice requirements of the state, however, the policy may still be enforced, even if years have passed since the last payment was made.

Illness-Related Insurance Lapses

A common scenario that leads to a policy lapsing is when a policyowner in charge of paying the policy’s premiums falls seriously ill or is facing a decline in mental health.  These individuals often miss their premium payments due to their illness.  Courts have been willing to take this scenario into account, especially if the policyowner/payor has loyally paid their premium up until the time that he fell ill.  The Boonswang Law Firm has extensive experience dealing with these scenarios and have found tremendous success with these illness-related lapse cases.

Reinstating Lapsed Policies

If your policy lapses, there can also be an option to apply for reinstatement of the policy.  When one applies for reinstatement, however, the insurance company gets the opportunity to review your most recent medical records to reconsider whether they would agree to insure you.  If your application for reinstatement is accepted, this also resets your two-year contestability period.  Thus, if the insured dies within two (2) years of the effective date of the reinstated policy, the insurance company may contest or deny payment of the death benefit based on any misrepresentation on the reinstatement application.

Since life insurance policy proceeds are assets upon which many families rely after a loved one has passed on, there are laws in place mandating a grace period when a lapse occurs.  Once a premium payment is missed, the grace period begins.  Therefore, if the insured dies within the grace period (usually 30 days), the insurer may still be required to pay the death benefit.  The grace period also allows time for someone who missed a payment for financial, health, or other reasons to catch up and make the payment before the policy lapses.  Once the grace period is over, however, the policy is considered lapsed and the insurance company will deny payment of the death benefit.

An Insurance Lawyer Can Help With Lapsed-Policy Claims

When a beneficiary does not get paid after a life insurance policy lapses, the beneficiary should contact the life insurance lawyers at The Boonswang Law Firm.  Many states require insurance companies to notify policyowners that they have missed one or more premium payments.  If an insurance company has not followed the lapse notice laws of your state, you may still be eligible to receive the policy’s benefits.  Our attorneys are very well-versed in analyzing the lapse notice laws of states throughout the country.  Our concentration in this area has helped us hold insurance companies accountable when they have not complied with the law, bringing countless families the financial security that they need by obtaining death benefits that are rightfully theirs.

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How Does Divorce Affect the Beneficiaries of a Life Insurance Policy?

What does divorce mean for life insurance beneficiaries?

Laws that govern divorce, also known as family law, vary from state to state.  Beneficiaries of a life insurance policy may be the spouse from whom you are separating, as well as your children.  The general rule is that in many states divorce does not affect a beneficiary designation in a life insurance policy, however, in some states it does. Read on to find out how.

Life Insurance Beneficiary Rules after Divorce

Will your spouse still be a beneficiary?

If your spouse is a beneficiary some states recognize a legal doctrine called an automatic revocation by implication, which means that death benefits that the divorced parties could receive by virtue of their union is revoked.  In other words, the ex’s beneficiary designation is automatically revoked by their divorce.

If there is an express provision in the deceased’s will or otherwise that states a divorce order will not revoke rights that the spouse had in an insurance policy, then this automatic revocation is less likely to be effective. Also, federal ERISA law governing employment life insurance can supercede state law.

If you believe you should be a beneficiary of your ex’s life insurance policy but your claim was denied, contact an experienced life insurance beneficiary attorney to help you with your case.  We get our clients paid.

Will your spouse’s dependents be beneficiaries?

Some families use irrevocable beneficiaries in insurance policies so that the support recipient has funds to support dependents in case the support obligor dies. This designation is sometimes given as a part of a separation agreement or divorce settlement.

The details of such a term, if later there is controversy, may be resolved in court. In some states, if the deceased had wished the ex-spouse to remain a beneficiary after divorce, he would have to expressly rename the ex-spouse as the beneficiary after divorce.

Because in most insurance policies, the insured retains the contractual right to change beneficiaries at any time, there is no legal right on the part of the beneficiary to the proceeds.  If there is a separation agreement or prenuptial agreement in place that requires a spouse to have life insurance, only then is there a legal right in the proceeds of the policy. The life insurance divorce beneficiary can be the ex-spouse under these circumstances.

Divorce and Life Insurance Policies

If the divorce is still pending, and there are court orders prohibiting parties to convey or dispose of property, changing beneficiaries might not apply to the prohibition.  

If in the separation agreement between two parties, a term states that divorce will eliminate any right or interest the ex-spouse has to life insurance proceeds, then the failure of the deceased to designate a new beneficiary will not render the term inoperable:  the ex-spouse will still have no interest.

The contingent beneficiary to your life insurance policy is still entitled to receive proceeds in the case that the primary beneficiary (the ex-spouse) is no longer entitled.  However, if there is a manifestation of intent on the part of the insured that the contingent beneficiary should not have rights to the proceeds (for example, if there is language in the policy that the contingent beneficiary may only receive proceeds after the death of the primary beneficiary), then the contingent beneficiary may not have access to the proceeds.  In the case where there is no explicit language of preconditions, then the contingent beneficiary will be qualified to receive the proceeds after the divorce.

Questions about life insurance and divorce?

Life insurance is a legal contract and must be evaluated with your specific situation in mind. For example, we were able to get a client beneficiaries paid when the divorce decree specifically provided that the insured’s policy was to name his dependents as beneficiaries in a specified amount as long as support was being paid.

For a consultation about the legal implications of divorce on your insurance policies, call the offices of Boonswang Law at  (215) 940-8900 or visit out website for more information about life insurance beneficiary divorce.

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Does Life Insurance Cover Accidental Drug Overdose?

Will insurance companies pay a life insurance claim for a death caused by drug overdose? It may, depending upon the circumstances of the death.

If the insured died of a drug overdose within the contestability period, the life insurance company will almost certainly deny your claim for death benefits. Even if the insured died with drugs in their system after the contestability period, the life insurance company may deny your claim.

Wondering what to do if your claim was denied? If your claim was denied because the insured died with drugs in their system or the insured died from a drug overdose or alcohol poisoning, call us. We have gotten many beneficiaries paid under these circumstances, and we will investigate and find out whether you should be paid.

If You or Someone Close to You is Struggling with Substance Abuse, Contact SAMHSA’s National Helpline to Find Help

SAMHSA’s National Helpline, 1-800-662-HELP (4357), (also known as the Treatment Referral Routing Service) or TTY: 1-800-487-4889 is a confidential, free, 24-hour-a-day, 365-day-a-year, information service, in English and Spanish, for individuals and family members facing mental and/or substance use disorders. This service provides referrals to local treatment facilities, support groups, and community-based organizations. Callers can also order free publications and other information.

Is an Overdose Considered an Accidental Death?

Each life insurance policy defines “accidental death” differently. The life insurance laws in each state will define “accidental death” differently as well. Whether the insured died from an accidental overdose of prescribed drugs or an overdose of illegal drugs may also matter.

Unfortunately, alcohol or drug use are among the most common reasons life insurance claims are denied. If you are a beneficiary whose claim was denied due to death by alcohol or drugs, call us. Your consultation will be free of charge, and we do not get paid unless and until you do. We’ve gotten many clients paid when their life insurance claim was denied due to suicide by showing that the death was accidental.

Case study: our client’s claim was denied when an insured died of an accidental drug overdose in his hotel room while on a business trip. We were able to show that the overdose was accidental and not suicide because he had laid out his clothing for the next day.

Does Life Insurance Cover Suicide by Drug Overdose?

Probably not. Suicide is a typical exclusion that is found on most life insurance policies, but it still may be worth your time to speak with a life insurance attorney.

“Exclusions” are the typical reasons life insurance won’t pay out. If the insured committed suicide by drug overdose after the contestability period, whether or not the policy will pay out will depend upon the exclusions in that policy and whether the facts point to accidental death rather than suicide.

If the insured died of suicide from a drug overdose during the contestability period, your life insurance claim will be denied.

If you or someone you know is struggling with thoughts of suicide, call the National Suicide Prevention Hotline at 1-800-273-8255 to access their national network of local crisis centers that provide free and confidential emotional support to people in suicidal crisis or emotional distress 24 hours a day, 7 days a week.

Will my life insurance claim be denied if the insured died from prescription drug overdose?

It depends upon whether the circumstances of the death show that the death was accidental or that the death was suicide, as well as the exclusions in the insured’s policy.

If the insured did not disclose that they took prescription drugs on their initial application and medical questionnaire, the life insurance company may deny your claim due to misrepresentation.

Can a Life Insurance Claim be Denied for Drug Use?

Will life insurance pay if drugs are in the insured’s system at death? Perhaps, but it is more likely your claim will be denied initially.

Life insurance companies only make money for their shareholders when they don’t pay claims. They may automatically deny your claim even if further investigation would show that the drugs were not the cause of death.

If the insured was using drugs but the drugs were not the cause of death, your claim for death benefits should be paid. If your life insurance claim was denied, don’t take no as an answer! Call us – we may be able to help.

Case study: we got our client paid when the insured was killed in a motorcycle accident. While he had illicit drugs in his system, drug overdose was not the cause of death.

Typical Exclusions Related to Drugs and Alcohol Include:

  • no benefits will be paid for any loss or covered injury that: “…occurs as a consequence of being intoxicated or as a consequence of taking, using or being under the influence of any narcotic unless administered on the advice of a physician.”
  • Accidental death benefits are not payable when death occurs as the result of taking drugs or medications that are not prescribed to the decedent or when taking them against prescribed orders.
  • In no event will we pay a benefit where loss or injury is caused directly or indirectly by, results from, or there is contribution from, any of the following: (6) motor vehicle collision or accident where you are the operator of the motor vehicle and your blood alcohol level meets or exceeds the level at which intoxication is defined in the state where the collision or accident occurred, regardless of the outcome of any legal proceedings connected thereto.
  • The policy does not cover any loss resulting from injury sustained as a result of being legally intoxicated from the use of alcohol.

Was Your Claim Denied Due to Drug Overdose or Alcohol Poisoning?

If the insured’s death was due to drug overdose or the insured’s death was alcohol-related, and your claim was denied, there may be an argument that the insured’s death was accidental or that the cause of death was not substance abuse or overdose.

We have gotten many clients paid when the insured died with drugs or alcohol in their system. Call us today to schedule your free case evaluation, and let us help you get paid too.

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