Articles Posted in Life Insurance

Often times when a claim for benefits is denied, the reason for the denial is that the policy has been cancelled.

“Cancellation” refers to the insurer’s termination of coverage before the end of the policy period.  A cancellation is in contrast to a non-renewal, which involves an insurer’s unwillingness to reissue the policy following the completion of the policy term of coverage.

Most insurance policies contain provisions regarding cancellation and the Courts honor this provisions as can be seen in the 1994, Waco Court of Appeals opinion styled, Truck Ins. Exch. v. E.H. Martin, Inc.  Specific provisions for cancellation of coverage must be precisely followed by the insurer and will be strictly construed by the courts.  This was seen in the 2001, Corpus Christi Court of Appeals opinion styled, Jones v. Ray Ins. Agency.

What is FEGLI?  FEGLI stands for Federal Employee’s Group Life Insurance and is a life insurance program for Federal and Postal employees and annuitants.  The law related to FEGLI is authorized by law and can be found in Chapter 87 of Title 5, United States Code.  The Office of Personnel Management (OPM) administers the Program and sets the premiums.  The FEGLI regulations are in Title 5 of the Code of Federal Regulations, Part 870.

FEGLI is group term life insurance.  It does not build up cash value.  You cannot take a loan out against your FEGLI insurance.

OPM has a contract with the Metropolitan Life Insurance Company (MetLife) to provide this life insurance.  MetLife has an administrative office called the Office of Federal Employees’ Group Life Insurance (OFEGLI).  OFEGLI is the contractor that adjudicates claims under the FEGLI Program.

Repeating what was stated in the post immediate to this one, “It is important to understand how difficult claims that are governed by the Employee Retirement Income Security Act (ERISA) can be.  The law in this area of law is very tough for claimants.”  This is illustrated again in a December 2020, opinion styled, Erica Talasek v. Unum Life Insurance Company of America, et al.  The opinion is from the Southern District of Texas, Houston Division.

The insured, Ben Talasek, had life insurance through a Plan his employer, NOV, offered.  NOV delegated authority and discretion to UNUM to handle claims and made benefit determinations.

Ben was covered by basic life insurance coverage and Ben also enrolled in a voluntary supplemental plan during November 2013.  Unlike the basic life insurance, which did not require medical underwriting, the supplemental life insurance required an employee to submit evidence of insurability and obtain approval for coverage by Unum.  On January 18, 2014, Unum sent Ben a letter informing him of an error in his application and the need for additional information.  Around this time, Ben was diagnosed with pancreatic cancer.  Ben called Unum on January 21, 2014 to check on the status of his application and was told about the January 18 letter.  Ben corrected the error on the Evidence of Insurability Form and supplied additional information.  Ben called Unum again on February 12, 2014 to check on the status of the application and was told that the standard turnaround time for a coverage decision was 4-6 weeks.  On March 3, 2014,several weeks after receiving his cancer diagnosis, Ben provided blood and urine samples and basic health history as part of Unum’s requirement that he prove insurability prior to approval of coverage.  He did not mention the cancer diagnosis.

The Employee Retirement Income Security Act (ERISA) is a confusing area of law for most people who have those type of policies and it is also confusing for attorneys.  An opinion dealing with the time periods for filing a life insurance claim are discussed at length in a 2021 opinion from the Western District of Texas, Austin Division.  The opinion is styled, Dusty Bauer and Allan Agababa v. National Union Fire Insurance Company of Pittsburg, PA and AIG Claims, Inc.

This lawsuit is concerning accidental death benefits owed upon the death of Shelly Bernstein (Decedent).

The Decedent had an accidental death benefit policy through his employer which was funded by National and AIG.  The policy limited conditions under which the death benefits would be paid by providing contractual limitations periods.  Some of those limitations periods read as follows:

This post is a continuation of Parts 1, 2, and 3, posted earlier.  This case involves a life insurance policy claim denial that is governed by the Employee Retirement Income Security Act (ERISA).

The opinion is from the Southern District of Texas, Houston Division, and is styled, Erica Talasek v. Unum Life Insurance Company of America, et al.

As in most ERISA claims, the case is being decided on competing Motions for Summary Judgement.  The Court found in favor of Unum and explained it’s finding in detail.

Repeating what was stated in the post immediate to this one, “It is important to understand how difficult claims that are governed by the Employee Retirement Income Security Act (ERISA) can be.  The law in this area of law is very tough for claimants.”  This is illustrated again in a December 2020, opinion styled, Erica Talasek v. Unum Life Insurance Company of America, et al.  The opinion is from the Southern District of Texas, Houston Division.

The insured, Ben Talasek, had life insurance through a Plan his employer, NOV, offered.  NOV delegated authority and discretion to UNUM to handle claims and made benefit determinations.

Ben was covered by basic life insurance coverage and Ben also enrolled in a voluntary supplemental plan during November 2013.  Unlike the basic life insurance, which did not require medical underwriting, the supplemental life insurance required an employee to submit evidence of insurability and obtain approval for coverage by Unum.  On January 18, 2014, Unum sent Ben a letter informing him of an error in his application and the need for additional information.  Around this time, Ben was diagnosed with pancreatic cancer.  Ben called Unum on January 21, 2014 to check on the status of his application and was told about the January 18 letter.  Ben corrected the error on the Evidence of Insurability Form and supplied additional information.  Ben called Unum again on February 12, 2014 to check on the status of the application and was told that the standard turnaround time for a coverage decision was 4-6 weeks.  On March 3, 2014,several weeks after receiving his cancer diagnosis, Ben provided blood and urine samples and basic health history as part of Unum’s requirement that he prove insurability prior to approval of coverage.  He did not mention the cancer diagnosis.

It is important to understand how difficult claims that are governed by the Employee Retirement Income Security Act (ERISA) can be.  The law in this area of law is very tough for claimants.  This is illustrated again in a December 2020, opinion styled, Erica Talasek v. Unum Life Insurance Company of America, et al.  The opinion is from the Southern District of Texas, Houston Division.

The insured, Ben Talasek, had life insurance through a Plan his employer, NOV, offered.  NOV delegated authority and discretion to UNUM to handle claims and made benefit determinations.

Ben was covered by basic life insurance coverage and Ben also enrolled in a voluntary supplemental plan during November 2013.  Unlike the basic life insurance, which did not require medical underwriting, the supplemental life insurance required an employee to submit evidence of insurability and obtain approval for coverage by Unum.  On January 18, 2014, Unum sent Ben a letter informing him of an error in his application and the need for additional information.  Around this time, Ben was diagnosed with pancreatic cancer.  Ben called Unum on January 21, 2014 to check on the status of his application and was told about the January 18 letter.  Ben corrected the error on the Evidence of Insurability Form and supplied additional information.  Ben called Unum again on February 12, 2014 to check on the status of the application and was told that the standard turnaround time for a coverage decision was 4-6 weeks.  On March 3, 2014,several weeks after receiving his cancer diagnosis, Ben provided blood and urine samples and basic health history as part of Unum’s requirement that he prove insurability prior to approval of coverage.  He did not mention the cancer diagnosis.

Here is a strange case from the Southern District of Texas, Houston Division.  It is a 2020 opinion styled, Pruco Life Insurance Company v. Blanca Monica Villarreal, Transamerica Life Insurance Company v. Blanca Monica Villarreal.

This is a hard fought dispute over a large life insurance policy and discovery being conducted in two countries.  Many accusations of misconduct are being hurled by both sides.

The two life insurance companies were trying to depose Villarreal’s investigator.  Villarreal’s attorney objected to the questions based on it protected by attorney work-product rules.

The Employee Retirement Income Security Act of 1974 (ERISA) offers many of the same types of insurance coverage for individuals as other plans.  The distinctions with ERISA is that the plan is a plan for employers to offer to employees that is set and governed by Federal Law rather than State Law.

ERISA plans offer retirement programs, life insurance, disability insurance, and health insurance.  The Southern District of Texas, Houston Division, issued an opinion in November 2020, on a case that is governed by ERISA.  The opinion is styled, Wagna Mina huerta v. Shell Oil Company and Shell Oil Comprehensive Welfare Benefits Plan.

This case discussed a couple of issues.  One of those, rarely seen in an opinion, is discussed here.

Well, here is a case where the claim isn’t denied.  In fact it was paid.  But now the insurance company is suing the person who received the money and seeking to have the money returned.

The opinion is a 2020 opinion from the Western District of Texas, San Antonio Division, and it is styled, Metropolitan Life Insurance Company v. Lilliam Soto, Felix W. Soto.

MetLife initiated this declaratory judgment action seeking to resolve a dispute between the Soto’s.  Each assert entitlement to life insurance benefits payable under the Federal Employees’ Group Life Insurance Act (FEGLIA).  The decedent, Juan Soto, had a policy worth $350,000, which was payable on his death to his properly designated beneficiary and then, only if there was no designated beneficiary, to his wife Lilliam.

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