Life Insurance and AD&D Benefit Claims

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This week’s notable decision is another claimant-unfriendly opinion out of the Fourth Circuit neck of the woods – Dawson-Murdock v. National Counseling Group, Inc., et al., No. 3:18-CV-58, 2018 WL 3744020 (E.D. Va. Aug. 7, 2018). 

In this case, Plaintiff Dawson-Murdock deceased husband, Wayne Murdock, worked full-time for Defendant National Counseling Group, Inc. (“NCG”).  As a full-time employee, he was covered by a group life insurance policy funded by Unum Life Insurance Company of America.  On March 21, 2016, Wayne switched to part-time work.  Though it’s not clear from the opinion as to why Wayne reduced his work hours, the fact that he died six months later suggests it was due to a medical condition.  After he started part-time work, Wayne continued to pay premiums for his life insurance coverage. 
Continue Reading Court Rules No Remedy Available for Aggrieved Life Insurance Beneficiary

This week’s notable decision is White v. Life Insurance Company Of North America, No. 17-30356, __F.3d__, 2018 WL 2978641 (5th Cir. June 13, 2018), a dispute over life insurance benefits based on the application of an exclusion for death caused by intoxication or drug abuse.  What’s interesting about this case is that the insurance company had discretion to decide claims and it was a close call based on the evidence.  Ordinarily, when the evidence presents a close call, a court will uphold the administrator’s decision, especially under abuse of discretion review.  But in this case, the Fifth Circuit was troubled that LINA withheld an expert report that it commissioned during the claims process and violated ERISA Regulations by failing to disclose the report to the beneficiary.  This fact appeared to tip the scale in favor of the beneficiary.  The message to insurance companies should be loud and clear:  It doesn’t pay to hide the ball.
Continue Reading Fifth Circuit Rules in Favor of Life Insurance Beneficiary Based on Expert Report Insurer Failed to Disclose During Claims Process

This week’s notable decision results from a series of unfortunate events.  It also highlights an issue plan administrators and participants should be aware of when there is a switch of group life insurance policies.  In Cole v. American Heritage Life Insurance Company, No. 3:17-CV-494-PPS, 2018 WL 1875632 (N.D. Ind. Apr. 18, 2018), the district court enforced Defendant American Heritage Life Insurance Company’s group life insurance policy’s Suicide Exclusion in order to deny benefits for the life of Plaintiff’s deceased husband.  The Suicide Exclusion limits benefits to the amount of premiums paid if the insured commits suicide within 2 years of the certification date.  In this case, the insured committed suicide on January 2, 2016, one day after the American Heritage policy went into effect on January 1, 2016.  This seems cut and dry, except for one fact:  the insured was covered under the employer’s life insurance group policy offered by a different insurance company, Lincoln National, from January 1, 2014 until January 1, 2016.  That policy did not contain a suicide exclusion.
Continue Reading Court Enforces Suicide Exclusion In Group Life Insurance Policy Despite Insured’s Prior Coverage