Deliberately lying on a life insurance application is the surest way to have a claim for benefits under the policy eventually denied. An applicant for life insurance who fails to disclose a health condition or who intentionally misrepresents his or her alcohol or tobacco usage is setting up his or her beneficiaries for significant difficulties and potential disappointment. When a claim for benefits is presented to the insurer by the named beneficiary, the life insurance company will investigate potential grounds to deny the claim on the basis of a misrepresentation. When the life insurance company can demonstrate that the misrepresentation is material to the life insurance contract (i.e., that the insurance company would not have issued a policy or would have done so only for a higher premium or other modified terms), the carrier might be relieved from its obligation to pay the policy’s benefit to the beneficiary.
Is there something to distinguish a miscalculation or unintentional mistake from a deliberate misrepresentation? A Lubbock, Texas woman in Sanders et al. v. Life Insurance Co. of North America is discovering that where an insurance carrier might attempt to draw this line can be complicated and surprising.
The ‘Misrepresentation’ at Issue in Sanders
Henry Sanders purchased a supplemental life insurance policy through his employer. That policy was issued by the defendant insurance company, Life Insurance Co. of North America. On the life insurance application, Mr. Sanders allegedly listed his height as five feet, eleven inches. However, an autopsy conducted on Mr. Sanders following his death listed his height as only five feet, ten and one-half inches tall. Using the deceased medical reports, the insurance company claimed Mr. Sanders’ actual height was several inches shorter yet – between five feet, eight inches and five feet, nine inches. Based on this discrepancy in height, the insurance company allegedly claimed that the underwriter would not have approved Mr. Sanders’ application.
The life insurance company is allegedly continuing to deny the claim despite medical evidence suggesting that a person’s height can vary throughout their lifetime and can even vary up to one-half of an inch in a single day.
When a Misrepresentation Becomes Intentional
The heart of the matter in Sanders is whether the deceased deliberately misrepresented his height on his application. The plaintiffs in the case (Mr. Sanders’ wife and daughter) are contending that Mr. Sanders’ misrepresentation of his height – if a misrepresentation or false statement at all – was unintentional. Unintentional or inadvertent mistakes typically do not give the life insurance carrier reason to deny a claim for benefits where the claim does not appear to impact the degree or nature of the risk assumed by the insurer. Even if the insurance company would not have approved a policy had it been provided the correct information, an “honest mistake” will not necessarily render an otherwise valid policy void absent such language in the policy.
The life insurance carrier, however, is contending that the misrepresentation is intentional. Because Mr. Sanders is no longer alive, the carrier would need to rely on circumstantial evidence to suggest Mr. Sanders made an intentional misrepresentation. Such evidence might include the following:
- Height listed on his driver’s license;
- Medical appointment just before applying for a policy at which Mr. Sanders was informed of his actual height;
- Conversations Mr. Sanders may have had regarding his application; and
- Other applications for life insurance Mr. Sanders may have completed listing a different height.
If you have questions about an insurance claim, you are invited to contact our law firm to speak to an experienced Miami insurance claims attorney. My law firm specializes in representing policyholders in claims disputes in Miami and throughout Florida. Click here to read about some of our case results. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.