When Ava* went to work as an EMT and first responder, she wanted to make sure she had enough life insurance to protect her family if she died, so she sought out an agent for American-Amicable Life Insurance of Texas. When she met the agent in person, the agent was curious about Ava’s young child, who Ava brought with her to the meeting.
Ava’s child had pretty severe medical needs, was in a wheelchair and needed oxygen to live.
The agent proposed also insuring the child, and assured Ava that since no medical information was needed to add a policy for Ava’s child, Ava should pay and additional premium and insure against her child’s death. Ava was not expecting that offer, considering the pre-existing conditions her child had. The agent assured Ava that her child’s application would be accepted.
Ava questioned the agent, who went back to talk to her team before assuring Ava that yes, indeed, a minor child could be added to this policy without medical information.
American-Amicable accepted the application and Ava began paying premiums for her child.
Unfortunately, Ava’s child did pass away at the age of four.
Ava made the claim for life insurance benefits and was shocked to receive a denial letter from the company. The denial letter said CLAIM DENIED because we have received records that showed that significant medical information was not reveled at the time of the application.
American-Amicable tried to rescind the policy and return the premiums it had collected.
In insurance law, to rescind an insurance policy means to revoke or annul the policy, effectively treating it as if it never existed from the start. This action can be taken by the insurance company under certain conditions, usually when it is discovered that there was a misrepresentation or fraud involved in the application process by the policyholder.
After receiving the denial letter Ava found BenGlassLaw and proceed with our free denial letter review program. We obtained the policy, the application and additional information before appealing the denial of benefits.
We accepted the case because this insurance company needed to honor it’s promise.
In the appeal, we made the following arguments:
- Since the insurance company’s agent knew of the child’s condition, that knowledge was imputed to American-Amicable;
- Nowhere on the application did the American-Amicable ask for any information about the medical condition of the child;
- Although Virginia has poor bad faith law for insurance denials, this would be the perfect case to test the limits of Virginia’s bad faith laws.
After evaluating our appeal, the insurance company quickly paid the amount owed, realizing that it had made a colossal error that was only going to get worse if it resisted.
The BenGlassLaw Life Insurance team felt that this was a major wrong that needed to be corrected.
The team here has substantial experience with life insurance cases against some of the biggest insurance companies in the United States.
*Not her real name