Life Insurance Lawyer New York
When people buy life insurance, they look at it as a safety net for their family members. We all hope for the best, but in the event of death, a life insurance payout helps to ensure that loved ones are taken care of, or, at least, not suffer financial on top of emotional hardship.
But when an insurance company sells a person a policy, they look at it differently. Usually, insurers have a system called an actuarial table that virtually guarantees they will win out over all their policyholders. The system does work, if you look at the record profits posted by major insurance companies in recent years. Not surprisingly, insurance companies want to deny every claim they can, including yours.
Has your valid policy been denied by the insurer? Has your payment been delayed? Unfortunately, this happens to many people throughout the state. When a loved one passes away, as a beneficiary, you may be left to deal with a cold and impersonal company that does any and everything possible to avoid paying your claim. You could then be left high and dry to pay for medical and funeral expenses, not to mention left facing a bleak financial future.
Our top life insurance attorneys live and work in New York and are dedicated to helping people recover the money to which they are entitled. We understand that losing a loved one is an extremely difficult and emotionally trying experience, and the last thing you want to worry about is money. That is why our attorneys will fight to protect your rights and ensure the company upholds its agreement.
Despite being regulated by the New York Department of Insurance, these companies frequently try to avoid paying out on policies. After all, these companies make more money when they collect premiums than when they pay out claims. Therefore, some companies may look for any reason to retroactively cancel your policy or deny payment for your claim. By working with our highly experienced lawyers, you have the best chance to get the payment you deserve. Our firm recovers the full policy amount the majority of the time.
New York Life Insurance Claim Denial
One of the most common tactics life insurance companies use to deny a claim is accusing the insured of making a material misrepresentation on the application for the policy. This is virtually always done if your loved one passes away during what is called the contestability period, or the length of time during which a life insurance company is supposedly reviewing your application to decide if they want to cover you. Often they will claim your loved one misrepresented his or her medical history, health, age, alcohol of tobacco use, occupation, employment history, income, risky hobbies, ownership of other life insurance policies and other information.
They can claim that these representations cancel out the policy, even if they had nothing to do with the cause of death. Thus, they may claim that your policy is invalid because your loved one forgot to declare that they enjoyed heli-skiing, even if your loved one dies in a motor vehicle accident.
In these cases, the material misrepresentation is debatable, and an experienced New York life insurance attorney can make sure the policy is honored even in the face of such claims by the insurance company.
Under New York law, an insurance policy is considered void ab initio (from the beginning) if the insured made misrepresentations to the insurance company that were material to the of the policy. A misrepresentation is defined by statute as a false statement as to past or present fact, made to the insurer at or before the making of the insurance contract as an inducement to the making thereof. The failure to disclose is as much a misrepresentation as a false affirmative statement, and misrepresentations are considered material if the insurer can show that the misrepresentation induced it to accept an application that it might otherwise have refused. It is the applicant's duty to disclose all facts bearing on or pertaining to the insurability of his life, and even innocent misrepresentations, if material, are sufficient to void a contract of life insurance. Furthermore, an insured's assertion that he or she did not understand the meaning of the question is insufficient to excuse the insured's misrepresentations to an insurance company.[i]
Our New York Life Insurance Attorneys can help you prove that the inconsistency on the application for insurance was not material. Under New York law, a misrepresentation will not be deemed material unless the insurance company proves that if it had had knowledge of the facts misrepresented it would have led to refusal by the insurer to make such contract.[ii]In other words, a misrepresentation is material only if the insurer shows that the misrepresentation induced it to accept an application that it might otherwise have refused.
Many denial letters that beneficiaries receive state that the insurance company would not have issued the policy if it had known the true information. However, New York law states that the test is not whether the company might have issued the policy even if the information had been furnished; the question in each case is whether the company has been induced to accept an application which it might otherwise have refused.[iii] Furthermore, materiality is a question of fact to be determined at trial. Usually, when analyzing whether a particular misrepresentation is material, a court will look to evidence in the form of sworn affidavits of a qualifying underwriting agent who testified that the insurer would not have issued the particular contract if all facts had been disclosed, as well as underwriting guideline manuals and rules. An insurer must offer proof of its underwriting practices. Thus, to establish materiality of misrepresentations in an application for insurance, as would warrant rescission of the policy, the insurer must submit documentation such as the insurer's underwriting manual which pertains to insuring similar risks, and testimony of the insurer's underwriter or other qualified employee.[iv] This is a very difficult burden for the insurance company to overcome.
New York Life Insurance Law
The insurance industry in New York is governed by Article 32 of New York Consolidated Law. These laws outline claims procedures and policy requirements for the benefit and protection of the consumer. Every New York life insurance policy must contain the 10-day free look provision. During this time, a new policyholder can choose to decline the coverage and still receive a full refund of paid premiums. New York also requires that life insurance companies allow a 31-day grace period on late premium payments. During the grace period, the insurer will not cancel the policy, and coverage will continue uninterrupted so long as the account is brought current.
Carriers can deny life insurance claims for a variety of reasons. One of the most common reasons for denial is a material misrepresentation by the insured on an application. Under New York law, failure to disclose that the insured consulted a certain doctor or was treated at a hospital within a certain period of time from the date of the application constitutes material misrepresentation. The test for determining whether a misrepresentation is trivial or material is whether the insurance company would have rejected the application had the insured disclosed the truth.[v]
Specifically, pursuant to N.Y. Ins. Law § 149(2), a representation is a statement as to past or present fact, made to the insurer by or by the authority of the applicant for insurance or the prospective insured, at or before the making of the insurance contract as an inducement to the making thereof. A misrepresentation is a false representation, and the facts misrepresented are those facts which make the representation false. Moreover, no misrepresentation shall avoid any contract of insurance or defeat recovery under it unless such misrepresentation was material. No misrepresentation is deemed material unless knowledge by the insurer of the facts misrepresented would have led to a refusal by the insurer to make such contract. In determining the question of materiality, evidence of the practice of the insurer which made such contract with respect to the acceptance or rejection of similar risks is admissible.
Thus, for example, a misrepresentation that an applicant for life insurance has not had previous medical treatment, consultation or observation, or has not had previous treatment or care in a hospital or other like institution, shall be deemed a misrepresentation that the applicant has not had the disease, ailment or other medical impairment for which such treatment or care was given or which was discovered by any licensed medical practitioner as a result of such consultation or observation. The New York law states that if in any action to rescind any such contract or to recover on it any such misrepresentation is proved by the insurer, and the insured or any other person having or claiming a right under such contract shall prevent full disclosure and proof of the nature of such medical impairment, such misrepresentation shall be presumed to have been material.[vi]
Another common misstatement on an insurance application is concealment or omission about an existing life insurance policy, concealment of criminal record, motor vehicle violations, or driver's license revocation/suspension. In such cases, however, it is the insurance company who has the burden to establish as a matter of law that it would not have issued the life insurance policy to the insured had the application contained accurate information concerning the insured's motor vehicle accident record, criminal history and other life insurance policies.[vii] An experienced New York life insurance lawyer will demand that the insurance company adduce sufficient proof as to its underwriting practices with respect to applicants with a history such as that of the insured.[viii] Such proof may be an underwriter's testimony as to the internal company practices of determining eligibility or company's guidelines.
In addition, a skilled New York life insurance attorney will investigate into whether the insurance carrier failed to make reasonable inquiries regarding the decedent's application's answers. In many cases, it is found that the company should have made relatively easy and simple inquiries into the insured's medical, driving or criminal record or that the carrier was on notice that the insured had another life insurance policy at the time of application. If the insured provided false information on a life insurance application, New York law requires the company to deem material information worth verifying. If the company failed to verify such information, it points to a lack of materiality.[ix]
In addition, New York life insurance companies are obligated to settle claims in a timely manner. Thirty days after an insurer receives proof of death, an unpaid claim is considered overdue, and the proceeds begin accruing interest. Your New York life insurance lawyer will make sure that the interest is included in the final payment.
New York law allows insurance companies to contest statements made on a policy or application for up to two years from the effective date of the policy. The discovery of any misstatement is grounds for policy cancellation with a refund of paid premiums. Insurance companies are also exempt from paying claims made within the first two years where the cause of death is suicide or self-inflicted injury.
If your claim was denied, you need to consult an experienced New York attorney who focuses on recovering death benefits for beneficiaries. The Insurance Claim Law Firm is a top life insurance firm with a proven record of success in recovering millions of dollars in denied life insurance claims.
With our skilled New York Life Insurance Attorney on your side, the insurance company is usually eager to settle out of court, but, if not, we are experienced litigators and can fight through a trial, if necessary. If you lost a love done, and have been denied the benefits of life insurance, call our New York Life Insurance Lawyers today. We can assist you with your denied or delayed life insurance claim.
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John Hancock Life Ins. Co. v. Perchikov, 553 F. Supp. 2d 229, 236 (E.D.NY. 2008).
[ii] N.Y. INSURANCE LAW § 3105(b).
New England Life Ins. Co. v. Taverna, 2002 U.S. Dist.. LEXIS 10747 (E.D.N.Y. Mar.1, 2002).
Precision Auto Accessories, Inc. v. Utica First Ins. Co., 52 AD3d 1198, 859 NYS2d 799 [4th Dept 2008].
Geer v. Union Mut. Life Ins.Co., 273 N.Y. 261 (N.Y.1937).
Giuliani v. Metropolitan Life Ins. Co., 269 A.D.376 (N.Y. App. Div. 1945).
Best v. United States Life Insurance Co. in City of New York, 2008 NY Slip Op 32927U(N.Y. Sup. Ct. Oct. 15, 2008).
Sonkin Assoc. v. Colombian Mut. Life Ins. Co., 150 A.D. 764 (1989).
Curanovic v. New York Cent. Mut. Fire Ins. Co., 307 A.D.2d 435.
Authored by: Laura Elmer