Life Insurance: Understanding Pre-Existing Conditions

Feb 8, 2019 | Blog |

Chicago Life Insurance Attorney

Life insurance claims can be significant, and as such, they are often denied.  Beneficiaries may be taken by surprise, thinking that the act of securing benefits would have been straightforward.  In truth, however, insurers will take advantage of any opportunity to justify the denial of a significant benefits payout, in the life insurance context and otherwise.

Many life insurance claims are denied on the basis of the individual covered by the policy (the deceased individual) having failed to properly inform the insurer of a pre-existing condition that would have led to a higher premium rate or a rejection of the life insurance purchase application altogether.  Any mistake or omission — whether intentional or unintentional — may qualify as a material misrepresentation that could lead to the loss or reduction of life insurance benefits.

Let’s explore some additional relevant matters.

Disclosing a Pre-Existing Condition

What qualifies as a pre-existing condition (for which the applicant for coverage has to notify the insurer) can vary from plan-to-plan.  The duty to disclose is not always unambiguously described in the purchase application.  For example, a life insurance contract might request information about serious illnesses, injuries, and other conditions such as cancer, heart disease, and diabetes, but may not make it clear what the “lower bounds” are.

Should you have to inform the insurer about every ache and pain, and what about a sore throat?  Though these examples may seem as though they are taken to absurd extremes, it is the simple, hidden symptom — a sore throat that eventually leads to throat cancer — that often gives rise to a conflict with a life insurance company.

In Illinois, if your claim is governed by state law, any ambiguous insurance contract provisions will be interpreted in the policyholder’s favor.  Thus, if the purchase application featured an objectively ambiguous request for the disclosure of pre-existing conditions (i.e., it did not clearly and adequately define what sort of conditions were necessary to disclose), then the court may interpret the provision in a way that is more suitable to your argument.

Conditions Often Develop Over Time

Pre-existing conditions — same as any other medical conditions — can be rather nuanced in terms of how they develop and present.  Conditions do not necessarily express in a predictable manner.  This can be difficult to understand as a mere statement, so let’s dig a little bit deeper and use an example to clarify how a conflict over pre-existing conditions might develop without the policyholder having misrepresented their overall health.

Suppose that your father purchased a private life insurance policy a few years ago, and you are the named beneficiary.  When you attempt to secure the life insurance benefits that you’re owed, however, the insurer denies your claim on the basis that your father (the policyholder) failed to inform them of his pre-existing spinal condition when he applied for and purchased the policy.  You contact an attorney and begin to investigate.

As it turns out, at the time that your father purchased the life insurance policy, he did not have a full-blown spinal condition, but did experience occasional aches and pains in his lower back area.  He — along with his physician — believed that the aches and pains were a normal symptom of long hours sitting in the office.  In reality, however, it was indicative of a serious spinal degenerative condition that ultimately led to his death.

Now, this example brings up a crucial issue: many conditions develop over time from health problems that do not (by themselves) qualify as pre-existing conditions worthy of notifying the insurer on an application.  One is not expected to tell their insurer that they get occasional backaches in order to fulfill their notice obligations.

The insurer is therefore reliant on proving that the policyholder (your father in this case) knew or should have known about their serious condition, even if it was not yet fully developed at the time.  Whether a policyholder should know about a serious pre-existing condition depends on the circumstances.  If the condition is asymptomatic, or has generic symptoms, or has been evaluated by a physician (with no diagnosis), then the policyholder cannot reasonably know about the existence of the condition.

Contact an Experienced Chicago Life Insurance Attorney for Assistance

In the life insurance context, and beyond it, insurers often engage in tactics intended to create difficulties for policyholders and their named beneficiaries.  It’s important not to resign yourself to the initial determination of the insurer.

If you are the named beneficiary on your deceased loved one’s life insurance policy and have had your benefits claim denied on the basis that the decedent failed to inform the insurer about a relevant pre-existing condition (or that the condition otherwise results in a coverage exclusion), then you’ll want to consult an experienced Chicago life insurance attorney for assistance.

Bryant Legal Group, P.C., is a boutique insurance litigation firm located in Chicago, IL and serving clients throughout Illinois.  Our attorneys have extensive experience representing insurance policyholders and their beneficiaries — including those that are attempting to recover life insurance benefits — in challenging disputes with their insurers.

Ready to learn more about how you can effectively navigate the insurance dispute and secure the benefits to which you’re entitled?  Call 312-561-3010 or send us a message through our website to arrange for a consultation with one of our attorneys.  We look forward to helping you move forward.

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