Posted 11 months ago
Life and Health Insurance
Life Insurance Waiver of Premium Due to Disability
When Laura Hawkins became disabled in 1982, she made a claim for a benefit under her employer’s life insurance plan called a “Waiver of Premium.” Life Insurance Premium Waivers are available under many employer sponsored group life plans. When an employee can no longer work due to a disability, they can apply to keep their life insurance for free under the premium waiver. A key part of these claims is that the employee must have medical evidence to prove they are disabled and cannot work to be approved for the life insurance premium waiver.
The life insurance plan’s administrator was Aetna Life Insurance Company. Years later, when Ms. Hawkins survivors filed a lawsuit for life insurance benefits, Aetna claimed that it had asked Ms. Hawkins for proof of her disability in 2003. Allegedly Ms. Hawkins never responded. Of course, Aetna had no written proof that it ever asked for disability documentation, nor any proof that Ms. Hawkins had received the requests Aetna claimed it sent.
Aetna Terminated Coverage in 2003 – But No Appeal Was filed
However, Aetna did have proof that it had terminated Ms. Hawkins coverage. Aetna had a copy of a November 2003 termination notice. It also had the certified mail receipt bearing Ms. Hawkins’ signature. Unfortunateley, Ms. Hawkins never appealed Aetna’s termination.
10 Years Later – Claim For Life Insurance Denied Due to No Coverage
When she died 10 years later in 2013, her survivors made a claim for life insurance benefits. Of course, Aetna denied the claim, and took the position that Ms. Hawkins no longer had coverage when she died.
The Court Decision – Benefits Denied
The District Judge that heard the case held that the survivors’ claim failed. The Judge viewed what they were trying to do as an effort to get more than Ms. Hawkins would have been able to get, since she lost her coverage in 2003. The key fact was that Ms. Hawkins never tried to appeal Aetna’s termination of her life insurance premium waiver. Because Aetna cancelled coverage at that time, and because Ms. Hawkins never tried to convert her policy to an individual policy, she had no coverage after 2003. Her survivors had no rights to bring a claim.
Hawkins v. Aetna Life Insurance Company, No. 14-944, 2016 WL 236056 (E.D. La. Jan. 20, 2016)
Takeaway from this case:
Make sure you appeal any termination of coverage by your life insurance company.
If you have questions about a life insurance or accidental death insurance denial, contact Life Insurance Attorney John Tucker online or call (866) 282-5260.
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