Jane Pierce has finally received the death benefits from her late husband's accidental death insurance policy from MetLife Inc. The insurer denied her benefits based on their fictional claim that Todd Pierce had taken his own life, rendering his policy worthless. In July 2010, MetLife settled and paid out the benefits owed to Pierce in full, amounting to $240,000, but with no interest or penalties for the months of denial.
Todd Pierce died in a car accident in July 2009. MetLife notified Jane Pierce of her husband's "suicide", though the autopsy report, medical records and a statement from the medical examiner all classified Pierce's death as accidental.
In the U.S., there are 112.8 million life and accidental death insurance policies provided by companies and associations to their employees or members. It's common for insurers to misrepresent facts and twist the truth to avoid paying out death benefits to survivors.
According to the American Counsel of Life Insurers, insurers don't pay out the full benefits in over 99 percent of claims. As of 2009, insurers in the U.S. were currently disputing a grand total of $1.3 billion in claims, $396 million of which were death benefits that had yet to be paid out.
"The insurer benefits if it rejects the claim," explains John Langbein, professor at Yale Law School. "Insurers like to take in premiums. They don't like to pay out claims."
Aaron Doyle, a professor at Carleton University in Ottawa, claims that most survivors don't file a lawsuit when they've been wrongfully denied benefits because they lack the emotional stability and the legal knowledge. Doyle has also heard cases where insurers convince survivors that they have no real claim to the benefits.
The most common reason cited by insurers to deny benefits is a "material misrepresentation," or a concealed or misrepresented fact in the insurance application. This can be anything from withholding tobacco use to mistakes in physician records.
Some states prohibit life insurers from denying death benefits if the policy holder died more than two years after the policy was issued. If this is not the case, the insurer will probably search high and low for a reason to deny survivors benefits.
If you have insurance issues as a result of a denial of benefits owed to you through life or accidental death insurance after a car accident, contact an experienced attorney to help fight for the benefits you're entitled to receive.
