Colorado Springs veteran sues USAA for denying husband’s $1 million life insurance policy

I find it interesting on so many levels that the carrier can assume to know what the applicant did or did not know, and whether or not the applicant willfully made a material misrepresentation on the application.

And they did this without questioning the applicant . . .

I talk to folks on a regular basis who do "not have high BP" even though they are taking BP med's. When I question them the response is along the lines of "I used to have high BP but not any more".

It completely escapes them that the BP med is not CURING the problem, only addressing the symptoms.

Too often agents, attorneys, carriers, etc assume the general public has a working knowledge of how insurance works, legal mumbo jumbo and medical terminology.

I also think Kirby had some valid points that either were misunderstood or simply fell on deaf ears of folks that made the assumption their position was right and anyone else is wrong.
 
I also think Kirby had some valid points that either were misunderstood or simply fell on deaf ears of folks that made the assumption their position was right and anyone else is wrong.

Thank you, although I did misinterpret the quote. I got defendant and decedent confused in that one. The plaintiff's attorney was still wrong, but not for the reason I was implying. Reading the decision, it appears that the plaintiff's attorney was completely unprepared.

Whether USAA knew or should have known about the OSA is very material. Had USAA known about it, but ignored it, then USAA would have owned the claim and been unable to contest per the cited decision. However, since the insurer had no knowledge and reasonable should not have known, then the had no obligation to investigate it before issuing the policy.

And while in general I do agree with your point that agents can often help applicants be more open in answering applications, it is strongly implied this applicant knowingly withheld information. There were three different questions he should have answered yes.

I'm sure we have all applicants ask us about those very questions. "tests within 5 years, other tests not previously disclosed.." I have flat out told people when we were unsure if a previous question applied that let's just answer this yes and disclose. That way it is on the application regardless of whether the previous question should have been yes or no.
 
I have flat out told people when we were unsure if a previous question applied that let's just answer this yes and disclose. That way it is on the application regardless of whether the previous question should have been yes or no.

Did that on an app today.

Client cut his finger 2 weeks ago. 14 stitches. Rx for Oxy which he filled. Took 2 pills. That's the only med he has taken in the last 5 yrs. I told him it should not impact their decision but let's put it on the app and let underwriting decide.
 
Please keep in mind this may not be fraud. This might simply be refusal by the insured to believe he had a condition. There were two tests done. That's rare.

As somarco pointed out and I am sure many of us have experienced, there are people who don't think they have conditions because they are treated for it and the numbers aren't bad. Or they simply refuse to believe the findings.

I agree that an agent would have been a better choice than a DIY plan this guy did. More than likely, this situation would have come up in the conversation between the agent and the applicant. and a different direction could have been taken.
 
Please keep in mind this may not be fraud. This might simply be refusal by the insured to believe he had a condition. There were two tests done. That's rare.

In between the two tests he used a CPAP machine. The second test involved adjustment of the continued use of the CPAP. After the second test had two more medical consults regarding the condition. Again, even if he didn't believe it was a "respiratory condition" the second and third questions on the app would have to have been answered yes with an explanation had he not knowingly concealed the apnea.
 
I don't think this has been addressed, Why did USAA issue this policy when they had the right to review medical records and a signed MIB to do their on fact finding?
 
I don't think this has been addressed, Why did USAA issue this policy when they had the right to review medical records and a signed MIB to do their on fact finding?

Actually it has been addressed repeatedly in case law. USAA was under no obligation to obtain medical records. When the applicant clean-sheeted the application, USAA saw no warning sides that would require a prudent insurer to order medical records for further investigation.

Lots and lots of life insurance gets issues without an APS. If the amount is within certain guidelines for the age, then records are typically only ordered if there is something in the information disclosed that warrants further investigation.
 
Wasn't the face amount 1 million? What was the age of the client?

Read the article.

This defense basically boils down to: "The company should have checked harder to make sure I wasn't lying." Anyone using that defense or claim should not expect a warm reception in any court of law or with any jury.

The applicant made material misrepresentations that the insurer relied on to their potential determent.

And what is truly sad, at the correct rate class, the premium would still have purchased over $500,000 in death benefit. Money I'm sure his widow could use. All he had to do was tell the truth and she would have money to help her through the financial difficulties of his passing.
 
I did not read the article my bad! That is a terrible defense. I don't write with any Carriers who will issue a policy that large without doing an APS.
 
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