Minor Mistakes Can Derail Life Insurance Claims: Failure to Personally Sign Application

J.P. Gonzalez-Sirgo
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Founder of J.P. Gonzalez-Sirgo, P.A.

People purchase life insurance policies to provide financial security and support to surviving loved ones, but family members can experience severe hardships when the insurance company refuses to pay benefits to a decedent’s beneficiaries.  Beneficiaries typically expect that a life insurance policy will pay benefits as indicated by a policy though insurers often search for any justification to deny paying benefits.  One of the first places that insurers focus when trying to deny a claim is the insurance application.  Sometimes even a minor or “hyper-technical” error can cause problems when a claim is filed.

The case of Roi Thi Do v. Lincoln Benefit Life Co., a Florida court case decided by the 2nd District Court of Appeals, provides an example of how a technical mistake can create huge problems.  The court construed Florida Statute Section 627.404 which provides in pertinent part that the party applying for life insurance “apply for or consent in writing to the contract and its terms.”  The court strictly construed the provision to mean that an insurer could rescind a life insurance policy if the application was not signed personally by the applicant.

While this might seem like a commonsense requirement, situations arise where it might make sense for someone to authorize another person to sign the policy.  If the insurance company engages in conduct that appears to ratify the “informal agent’s” act of signing, beneficiaries can be severely disappointed.  In the Roi Thi Do case, an elderly Vietnamese man with poor English skills took out a life insurance policy.  When the insured went to meet with his insurance agent, the policyholder brought his wife, daughter and grandson’s father.  The man decided that he needed some time to consider his decision, so he did not sign the application during the meeting.

The elderly man later had his grandson’s father sign the application on his behalf.  Because the insured subsequently submitted to a paramedical exam and executed a consent form for blood and urine samples as part of the application process, the insured and his beneficiaries had no reason to suspect that having a family member sign the application would present a problem.

Unfortunately, the insurance company denied the beneficiaries claim and rescinded (voided) the policy after the policyholder passed away.  The court ruled in favor of the insurer because the insured had not personally signed the application or otherwise “consented in writing” to the policy and its terms as required by Florida Statute Section 627.404(5).

This kind of basic mistake can create enormous problems for surviving loved ones who are relying on life insurance benefits to compensate for the loss of a breadwinner.  In a situation like this, the insurer could essentially continue to collect premiums while lying in wait to suddenly spring the signature issue on unsuspecting beneficiaries.  Sometimes insurance companies prevail by denying claims based on technical issues and highly nuanced interpretation of policy language, but the best way to fight back is to review your situation with an experienced Miami life insurance claims lawyer.

Life insurance companies frequently rely on policy exclusions that are interpreted in a way that is unfavorable to the policyholder.  An experienced Miami life insurance claims attorney can help you counter such denials.   My law firm represents policyholders in claims disputes in Miami and throughout Florida.  The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations with a Miami life insurance claims attorney.  No Recovery, No Lawyer Fees.  Call 305-461-1095 or Toll Free 1-866-71-CLAIM.

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