The Case of the Disappearing Life Insurance Policy
A client, K, came to me because he was notified that his $200,000.00 life insurance policy had lapsed. He had paid the premiums, on time, for the past 30 years and could not understand what had happened. K and his wife spent months making telephone calls and getting nowhere. Finally, the company told him he had to reapply, but by the time he reapplied he had been diagnosed with a terminal illness and was turned down.
I got involved and started researching the company he originally bought the insurance from. I found a tangled web of buy-outs and spin-offs. His original insurance company was bought out by another company that was bought out by a financial services company who spun off the life insurance business. During these transitions, there had been two different third party administrators and many policies had been inadvertently dropped.
My emails and telephone calls were never answered. I sent demand letters, pursuant to the Massachusetts Consumer Protection Statute, M.G.L. c. 93A, to all of the companies involved, informing them that my next step would be a lawsuit. As a result of my demand letters, my client’s $200,000.00 policy was reinstated and the company paid my legal fees. I did not have to sue them.
On a side note: I tried to get the Massachusetts Insurance Commission involved because there are undoubtedly many others that this has happened to given the huge fiasco that was created by the multiple turnovers of data and policies. The Commission was not interested.
Insurance companies make mistakes and bad decisions that are unjust and hurt people. But an attorney’s persistence can get them to do the right thing.