Life Insurance Denied When They Accepted Premiums

Hey wait a minute, the life insurance company accepted premiums for over four years and now they are denying the claim.
Here is an interesting fact scenario from a 2004, Dallas Court of Appeals opinion.  The opinion is styled, Royal Maccabees Life Insurance Company v. James.
Here are some of the Facts in the case:  The insurance company was sued by a surviving spouse of a policy officer seeking an additional $50,000 in life insurance proceeds after the insurer paid the basic $50,000 upon the officer’s death.  It was undisputed that the insured applied for and paid premiums for over four years for the additional $50,000 in coverage.  It was also undisputed, however, that the insurer never sent a letter to the insured approving the disputed benefit as required by the insurance policy.  The insurer denied the additional $50,000 in coverage and refunded the premiums paid for this coverage.  The trial court entered judgment on the jury finding that the insurer breached the contract, committed fraud, and violated the DTPA, various sections of the Texas Insurance Code, and the duty of good faith and fair dealing.  The judgment included mental anguish damages, punitive damages, attorney fee’s and pre0judgment interest.  This appeal followed.
On the appeal the Dallas Court of Appeals reversed and rendered judgment in favor of the insurer on breach of contract, bad faith, and Insurance Code claims and remanded the remaining claims for a new trial.  The appellate court concluded that an insurer’s acceptance of premiums for additional life insurance coverage for more than four years prior to the insured’s death did not wive a policy provision that written approval from the insurer was required before the employee would br entitled to additional life insurance benefits.  The court began its analysis by reviewing the breach of contract claim and recognizing well established principles of Texas Insurance law holding that waiver and estoppel cannot be used to create insurance coverage.  The court reviewed policy language that the insured alleged was conflicting, ambiguous and supported a finding of coverage.  Applying equally well settled principles of Texas Insurance law holding that jurists should attempt to harmonize two allegedly conflicting provisions, the court found that one of the provisions applied to the first $50,000 of coverage which did not require the insurer’s written approval, while the other provision required written approval for amounts above $50,000.
Someone who has a claim denied under similar circumstance must immediately seek the assistance of an Experienced Life Insurance Lawyer.
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