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It's just that simple: Insurer denies claim on procedural grounds

An interesting and sad case crossed our desk this week. It concerns a case from outside of Florida that turned on an insurance rule that applies wherever you are: If you abide by the terms of the policy, the insurance company will consider your claim. Otherwise, the insurance company can deny the claim, and every court from the Atlantic Coast to the Pacific Coast will find the denial reasonable.

The insurance policy in question was a life insurance policy, the insured was a man who would soon die of cancer, and the intended beneficiary was his wife. It was December 2011, and the husband wanted to change his life policy to make his wife his beneficiary. He completed a change of beneficiary form as the insurer required. Neither he nor his wife sent the form to the insurer.

The policy contained a provision that an insured had 30 days from the day he or she signed a change form to deliver it to the insurance company. When her husband died, the woman filed a claim. Because of the 30-day rule, the insurer denied the claim. Her appeal was also denied.

She took the insurer to court. The court considered the policy language and looked, too, at the husband's will. He had included a provision in his will that his wife was the sole beneficiary of any life insurance policies. The insurance company had seen the will, too, but its decision rested on the policy language.

As it turns out, so did the trial court's and the appeals court's decisions. The policy was clear about the 30 days, and the will did not change a thing.

Life insurance benefits are non-probate assets; the payout is not considered part of the estate. A will only governs what happens with the assets (and liabilities) that make up the estate. So probate law was not on this woman's side either.

It isn't hard to surmise that the couple completed the form at a difficult time and that mailing it was just one of the many things that slipped through the cracks. Still, a contract is a contract, and the parties have to meet the conditions laid out in the contract before they can expect anything in return.

Source: Courthouse News, "Signed but Never Filed Form Won't Help Widow," Joe Harris, May 12, 2014

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