Life Insurance Denial for Failure to Timely Port of Convert Policy from Employee Benefit to Private Policy- Unfortunate, Yet Common
We often get calls from life insurance policy beneficiaries whose claims are denied because their deceased loved ones failed to properly “port” or “convert” their employment based life insurance coverage. Porting or converting life insurance coverage involves moving coverage from the employer group policy to a private policy when employment terminates.
Our recent client received a denial letter in the mail for that very reason, but we were able to get the denial reversed, with full payment of benefits.
Our client, Susan, and her husband Jack (not her real names), got the devastating news that Jack had terminal cancer with a very limited time to live. Jack went out on disability benefits for a while before dying, and meanwhile his employment was terminated, as it was clear he wouldn’t be returning to work.
Life insurance policy holders and beneficiaries face a very complicated set of rules when their employment-based life insurance coverage terminates because their employment terminates with retirement, illness, or pursuit of new employment. The employee with the life insurance coverage wants to remain covered, and the way to do so is by converting or porting their coverage to a private policy by paying their premium directly to the insurance company.
But the rules for converting or porting coverage are so complicated, that insureds often think they are still covered when they actually are not. Then their life insurance policy beneficiaries are shocked to find out too late, after their loved one dies, that there is no coverage. The rules to convert or port coverage are not only complicated, but are hidden away in employment benefit booklets where they are often never seen by the employee-insured. So no wonder denials for failure to port or convert coverage are so common.
Read on to see if her case sounds familiar. Maybe your denied life insurance claim can be reversed too…
Converting and Porting Life Insurance Coverage Can Go Wrong No Matter How Careful You Are
So the reality set in that Susan’s husband, hero and breadwinner would soon pass from this life. She watched their strong hero slowly, but as doctors sadly explained, surely, deteriorate mentally and physically. The family was involuntarily thrust into a range of emotions, experiences, thoughts, fears and difficulties that you may be experiencing now.
Jack was suffered the severe fatigue, weakness, nausea, vomiting and fevers brought on by the rounds of crushing chemotherapy in an effort to remain a family for as long as possible. Just a few extra months or even weeks were worth it. In the midst of all of that was going on, Susan and Jack were talking and planning how Susan would get by without Jack’s financial input. They discussed taking every step possible to assure that, at the very least, the life insurance benefits he worked hard for and paid for to protect his wife and son, remained in full force and effect. At least he could leave them that, along with memories of a great husband and father.
They told Jack’s employer and the insurer that they did not want to “miss any steps,” for to convert or port his life insurance coverage to an individual policy, being that he was specifically diagnosed to die in a few short months. They were told that everything was in place, and that they needed to pay their life insurance premium to the employer, who would pay the insurance company to keep coverage in effect. They did everything they were told to do, and believed that all life insurance coverage for Jack remained effective.
Imagine Susan’s dismay upon receiving the life insurance denial letter. A second gut punch while still reeling from her husband’s death.
Learning Susan’s Whole Story was Key to Helping Her Get the Bogus Claim Denial Reversed
We worked closely with Susan to help her build her claim carefully and systematically with new, undeniable evidence far beyond what she had presented to the life insurance company before they denied his claim.
We demanded the claim file, and Jack’s employment and payroll records, and were able to prove that premium for Jack’s life insurance policy was deducted from his pay and received by the insurance company up until the time of his death. Our investigation also disclosed 20 pages of email exchanges between the employer and insurer demonstrating that Jack inquired specifically about all steps necessary to port or convert his coverage, but insurance company personnel remained confused and in disagreement about Jack’s porting and conversion provisions even after his death. They never told him the right steps to take.
We presented all this evidence to the insurer in an administrative appeal of Susan’s claim, but it STILL refused to pay, claiming that Jack did not take the technical step of sending in a form that requested porting or conversion of his life insurance coverage.
Sometimes a Lawsuit in Federal Court is Necessary to Get Claim Denials Reversed
When the refusal to pay persists, there’s no choice but to take them to federal court. We sued the insurance company in federal court. We brought the case of Eddy v. Colonial Life Ins. Co. Of America, 919 F.2d 747 (DC Cir.1990), a case involving strikingly similar circumstances, to the Judge’s attention. That case states the law as follows: that an insurance company “has a duty upon inquiry to convey to a lay beneficiary…correct and complete material information about his status and options when a group policy is cancelled….This information would include the inapplicability of “continuation” provisions, the availability of “conversion” options, and the procedures for converting…health and life insurance coverage.”
Finally, close to the time of a scheduled trial, and faced with a likely federal court judgment against them, the insurance company agreed to pay full benefits to Susan.
Victims of Unfair Life Insurance Claim Should Always Appeal, and Bring the Insurance Company to Court if Necessary
In the end, because Susan continued to fight, appealing the insurance company’s denial of her life insurance claim, then taking them to court rather than just accepting a denial as the final word, she was able to get her benefits and maintain financial security for her son and herself.
Unfortunately, life insurance companies unfairly deny legitimate claims every day, but anyone faced with an unfair claim denial should continue to fight and appeal the denial. These unfair denials can be overturned with stronger evidence, properly presented, and court involvement if necessary.
Susan deserved the benefits Jack had paid premium for over the years, and it was an honor to help such a wonderful lady overturn such an unfair claim denial.
Have You Suffered an Unfair Disability Insurance Claim Denial? We’d Love to Hear Your Story and See if We Can Guide You to Benefits.
Call or Text for a Consultation Today: