Articles Posted in Life Insurance

Life Insurance Lawyers in the Dallas and Fort Worth area will see situations on a regular basis where the person who died had a life insurance policy naming the other spouse as the beneficiary – but there was a divorce later and the policy naming the ex-spouse was never changed.  What to do?  This is discuss in a National Review article titled, Divorces Can Be Messy … For Life Insurers.

Divorces are often characterized as “messy” for good reason.  While divorce proceedings can prove particularly challenging for the individual participants, they can also pose challenges for those adjudicating competing life insurance claims when the decedent insured’s ex-spouse, who has been designated as a policy beneficiary, claims a right to the death benefit instead of the surviving spouse, the insured’s estate or a secondary beneficiary.

Divorce-related life insurance disputes can end up before courts in litigation over the decedent insured’s estate, in litigation brought by a purported beneficiary against the insurance company, or in inter-pleader actions filed by the insurer.  In an inter-pleader action, the insurance company files a petition with the court seeking an order determining, for instance, which spouse – surviving or ex – is entitled to the decedent insured’s policy proceeds following a divorce.

It’s bad enough when private insurance companies mistreat life insurance beneficiaries but an April 2017, story from the Chicago Tribune shows that the U.S. Government does the same thing.  The story is titled, USPS Agrees To $49 Million Settlement For ‘Dawdling” In Paying Life Insurance Beneficiaries.

It’s bad enough for family members when a loved one dies.

Getting cheated by Uncle Sam afterward makes it worse.

Life insurance lawyers know about Texas Insurance Code, Section 1103.151.  Also known as the Texas Slayer Statute, it states:

A beneficiary of a life insurance policy or contract forfeits the beneficiary’s interest in the policy or contract if the beneficiary is a principle or an accomplice in wilfully bringing about the death of the insured.

Section 1103.152, goes on to say the proceeds of the policy go to the contingent beneficiary if there is one or goes goes to the estate if there is not.

Irving life insurance lawyers need to know every little aspect of the law in order to properly represent their clients.  A 1996, San Antonio Court of Appeals opinion deals with one of these “little” aspects of the law.  The opinion is styled, Mendoza v. American National Insurance Company.

Jerry Mendoza purchased a $25,000.00 life insurance policy from American on August 1, 1991.  The October premium was not paid.  The policy provided for a 31 day grace period.  On November 1, 1991, the last day of the grace period, American’s district manager, Sitka, verbally agreed to extend the grace period until November 4, 1991.  The policy, however, specifically provided that only American’s president, vice president, or secretary had the authority to extend this time period.  Jerry Mendoza died in an automobile accident on November 3, 1991.  The premium was never paid.  In a prior appeal, this Court affirmed a summary judgment in favor of American on Plaintiff’s breach of contract, negligence and bad faith claims.  This appeal concerns the trail court’s granting of summary judgment on Plaintiffs’ claims for intentional infliction of emotional distress, Insurance Code and DTPA violations.

The Court held that in order to qualify as a consumer under the DTPA, a person must seek to acquire goods or services by purchase or lease and those goods or services must form the basis of the complaint.  Lack of privity between plaintiff and defendant does not preclude a plaintiff from establishing status.  Section 541.060 provides standing to “any person” who has been injured by another’s engaging in an unfair or deceptive act or practice in the business of insurance as declared in the Insurance Code; rules and regulations issued under the Insurance Code or Section 17.46 of the DTPA.  Therefore, a plaintiff may assert causes of action under the Insurance Code for violations of Section 17.46 of the DTPA even though the plaintiff is not a “consumer.”  Carrion, a named beneficiary of the policy, would clearly be injured as a result of Sitka’s alleged misrepresentations.  Therefore, Clarion has standing under the Insurance Code.  Mendoza’a mother, in her capacity as representative of the the estate, however, does not have standing to assert Insurance Code or DTPA claims because those claims do not survive Mendoza’s death and his mother is not a “consumer” in her own right.

Texas Hill Country life insurance lawyers will tell you that a life insurance policy has to be read carefully.  This even means that the initial application has to also be read very carefully.  This is illustrated in a 1999, San Antonio Court of Appeals opinion.  The opinion is styled, Carolyn Noseff v. Tower Life Insurance Company, et al.

Mr. Noseff applied through an agent for a life insurance policy with Tower Life Insurance Company.  He died before the policy was delivered.  It is undisputed that delivery of the policy and collection of the first premium was a valid condition precedent to the policy’s going into effect.  His wife sued alleging that Tower Life failed to use ordinary care in delivery of the policy.  Tower Life moved for summary judgment, which was granted.  Mrs. Noseff, the wife of Mr. Noseff, filed this appeal.

This San Antonio Court of Appeals affirmed the summary judgment in favor of Tower Life.  The policy stated that it would not take effect until “the policy is delivered to the owner and the first full premium is accepted by the Company while the proposed Insured is alive …”.  There is no question that Noseff died without taking delivery of the policy, and signing off on the policy amendments.  While Texas courts have long recognized that an insurance agent owes a duty to a client at the inception of coverage, Texas does not recognize a claim against an insurance company for failure to deliver an insurance policy.  The cases relied upon to establish that an insurance agent can be liable to an insurance applicant if the agent fails to follow through on the promised performance does not pertain to the insurance company’s liability.  An agent or broker undertakes to procure insurance for another is paid therefore.

Granbury life insurance lawyers need to read this 1975, Texas Supreme Court opinion.  It is styled, Johnson v. Prudential Insurance Company of America.

This is a suit to collect benefits under a group life insurance policy.  Prudential resisted payment based on their assertion that the deceased willfully deceived the company by her statements made in procuring coverage.  The beneficiary contends that the statements of the insured were inadmissible and could not be considered because copies of the application were not furnished to the insured in compliance with what is now the Texas Insurance Code, Section 705.103.

Ten years before applying for this insurance, Mrs. Johnson, the insured, had her right breast removed because of cancer.  Mrs. Johnson made what she could have regarded as true statements, but they were incomplete and misleading.

The Galveston Court of Appeals issued an opinion in 1938 that is still good law.  The case is styled, Texas State Life Insurance Company v. Freeman Barton.

This is an appeal from a trial to the Judge wherein Texas State was ordered to pay the life insurance proceeds to the beneficiary together with the statutory penalty and attorney fees.

The policy had been issued on Marie Clemons on July 10, 1935, with Barton as beneficiary and Marie having died on November 29, 1935.  (As a side note, this case points out “both of them being negroes,” – makes you wonder about that time in history).

Have you ever wondered if someone has left you an insurance policy you do not know about.  The Los Angeles Times published an article in March 2017, that you might find interesting.  It is titled, How To Score A Piece Of California’s $365 Million In Unclaimed Life Insurance Benefits.

It might surprise you to learn that the state of California is sitting on a pile of cash that belongs to consumers — a big pile of cash — and is having trouble giving it away.

At issue are life-insurance payouts owed to state residents.  Under California law, insurers are required to turn over to the state any funds that go unclaimed for three years.  But audits of insurers’ books that began in 2008 found that the companies were clinging to billions of dollars that didn’t belong to them.

Llano life insurance agents need to know about this case from the United States 5th Circuit.  It is a 2011 opinion styled, Araceli Medina Garcia v. American United Life Insurance Company.

Araceli’s husband, Salvador, died in a car accident.  He had a policy with American through his employer.  The policy was an ERISA plan.  American’s plan administrator denied Araceli’s claim for benefits because Salvador was living illegally in the U.S.  Araceli filed a lawsuit seeking benefits.  On Salvador’s policy enrollment form he indicated his date of birth and social security number.

When Araceli made a claim for benefits, she submitted a proof of death form, her Mexican identification card, and Salvador’s death certificate, identifying his date of birth as above and his place of birth as Mexico City and the above social security number.  No documents reflected Salvador being a U.S. citizen.  American was then sent Araceli’s alien registration card and a copy of Salvador’s I-9 form, which was expired.

Dallas and Tarrant County life insurance lawyers should read this case from 1932.  It is important to point out that this case has been disapproved by a later court but the idea behind the case is still relevant to arguing similar facts.  The case is styled, First Texas Prudential Insurance Co. v. John Pipes and is out of the El Paso Court of Appeals.

John Pipes was the beneficiary on a life insurance policy insuring the life of his wife.  When she died, he submitted a claim for benefits and was denied.  Upon trial of the case, judgment was awarded to Pipes and this appeal followed.

First Texas points out that the application for insurance contained the question:  Has life proposed ever suffered from consumption?  The question was answered “No.”  First Texas submits that said answer was false; that the application was signed by Pipes and without the knowledge of the insured; that the uncontroverted evidence shows that if the application for the policy had reflected that the assured had had incipient tuberculosis, though arrested, said application would have been rejected, and that under the evidence the court should have found that said representation was material to the risk as well as false, and, so finding, should render judgment for First Texas.