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

No need for an apology.

I agree, he answered the question wrong. I cannot ascertain why or the motive. It makes no sense. Do you imagine that if he had said yes, they wouldn't have issued the policy? No one seems to be able to answer that.

Do you know if an agent was involved anywhere in the process? Was this application done on line? What did the client sign? Remember, this was an ap for $1m.

I once competed for business on a smoking client. Before he would buy from me he wanted to talk to his existing company. He called me to say they had come back with a better premium. I questioned him about it and eventually told him to go ahead and buy it but he agreed he would let me see it after it was delivered. When I got to his home, Iooked at the policy and then the ap in the back of the policy; it was checked
"non-smoker". I asked if he saw that. He said the agent, with his manager present, filled in the form and all he did was sign it. He said the agent never asked him the question, and that the agent knew he smoked because he smoked in front of him. I filed a complaint on his behalf with the regulators, nothing came of it.

So for you an omission is a lie. Fine. But it doesn't matter, the omission opened the door to the policy being contestable (withing 2 years). He could have been killed by a drunk drive while he walking across the street and the policy was never going to pay.

But if you assume an omission is a lie, then you can also assume it was fraud, and the policy could have been contested (in a number of states) 5 years later.

I am not giving anyone a free pass. But usually people are innocent until proven guilty. Further, life insurance applications are long, tedious documents and in my opinion should be completed with the assistance of a real live life insurance agent present. There's a reason they make you get a license and E&O insurance.

USAA is a direct writer, everything is purchased either online or through a company employee. I believe it said in the beginning that he purchased online in this case.

And yes, if you are on a witness stand and asked if you run Compulife and you say no, is that not incorrect? And if you know for a fact that you know you run Compulife, is it not a lie?

While we are unable to question him, the fact he answered three different questions no, any one of which he should have answered yes, then I'm inclined to believe he did it knowingly. This is my opinion, so you can continue to debate it but it isn't provable either way.

And yes, in most states, a material misrepresentation is enough to void a policy within the contestable period, it need not relate to the actual cause of death. I say most states because I recall reading at least one state required it relate to the actual cause of death. I don't feel like looking, and I'm ok with a rule either way on this.

Also, the original article mentioned that had he been written at the correct rate class, the premiums paid would have bought over $500,000 in death benefit. He was far from uninsurable, he simply wasn't going to get the walk on water rate he wanted.

Finally, while I believe in this case his omission was a lie, that doesn't mean it can be proved to the point of being fraud. And again, this is no different than answering no when you should answer yes on a witness stand. Despite what you seem to think, or perhaps from your experience in Canada, proving fraud without a living perpetrator is not such an easy task.

I do agree with you, people should use agents as they generally help. However, people still omit facts or outright lie to insurance agents as well.
 
Why pay money to underwrite every case, when you can just pay money to underwrite claims and then deny the claim based upon what you find at that point? And if regulators let them get away with that behavior, who's to stop it?

What did the rest of you think was going to happen with this rush to Simplified Issue junk?

you have all the answers, you should maybe get a few of your friends and neighbors to pool their money together so you can create your utopia insurance carrier that risks millions on peoples lives, has to sell it at a competitive price & has to deal with clients or agents that may not always be truthful in their medical habits or use of nicotine or other substances.

I am pro consumer, but you seem anti-carrier which is a bit ironic as I assume you have made a few pennies from all these rotten insurance carriers that only collect premiums and want to deny every claim by underwriting it after death (not actually a fraction of a rounding error of all death claims handled each year in the industry)
 
all these rotten insurance carriers that only collect premiums and want to deny every claim by underwriting it after death (not actually a fraction of a rounding error of all death claims handled each year in the industry)

Life insurance companies are allowed BY STATUTE to underwrite the insurance after death if the death occurs within two years after the policy is issued.

It's your legislators who enact statutes.

Perhaps you and your friends and neighbors should pool your money and lobby your legislators to change the contestability period to less than two years if you don't like the current laws.
 
Life insurance companies are allowed BY STATUTE to underwrite the insurance after death if the death occurs within two years after the policy is issued.

It's your legislators who enact statutes.

Perhaps you and your friends and neighbors should pool your money and lobby your legislators to change the contestability period to less than two years if you don't like the current laws.

Hey jack, I think you missed my sarcasm in the post. I am fine with the checks and balances between life consumers, carriers, regulators & courts. I was being sarcastic toward Robert Barney who had given the impression that carriers are merely there to collect premiums so they can later underwrite & deny claims
 
Hey jack, I think you missed my sarcasm in the post. I am fine with the checks and balances between life consumers, carriers, regulators & courts. I was being sarcastic toward Robert Barney who had given the impression that carriers are merely there to collect premiums so they can later underwrite & deny claims

Plus it isn't as easy to post-claim underwrite as some would think. In one of the many decisions Jack cited, there is precedence that once an insurance company is made aware, they have an obligation to investigate or they are barred from using it to rescind the policy.

It all comes down to the applicant being honest and open. Once it makes its way onto the application, the insurance company owns it if they issue.
 
I was somewhat surprised that no one here is asking or saying how long the policy was in force. Was it in force less than 2 years, or more?

Was this a policy replacement?

This part of the article caused me some concern:

USAA says sleep apnea was listed online to get a quote for the policy and on the application. Bobkowski died from an aortic aneurysm. Experts differ on if that could be linked to sleep apnea.​

Snoring may or may not be sleep apnea. It is when the airway closes, and the individual stops breathing that sleep apnea may be the problem. The bigger symptom (problem) is if the person is constantly waking up from it. Either way, no one knows until a sleep study test has been conducted.

Can anyone explain what sleep apnea has to do with an "aortic aneurysm"? It sounds as if the life insurance company is using something unrelated (post claim underwriting) as an excuse to deny a claim.

And finally, who did the medical part II of the policy. The company is talking about questions "online". Was this an electronic ap and sale?

I keep lecturing the agents that I know that clients should never avoid having a paramedical. A paramedical costs the insured nothing. This brings a knowledgeable third party into the medical underwriting part of the process and gives the beneficiary another layer of protection against this sort of claim denial.

I will never watch a USAA commercial, featuring what appears to be veterans, the same way again. You would think where there is any benefit of a doubt, it would go to a veteran. I expect anyone competing with USAA to keep a copy of that story handy.

Just started reading this thread so if someone already stated this sorry

The death does not have to be related to what they are contesting. He could have died in an accident and his application answers would still be questioned.
 
I was somewhat surprised that no one here is asking or saying how long the policy was in force. Was it in force less than 2 years, or more?

Was this a policy replacement?

This part of the article caused me some concern:

USAA says sleep apnea was listed online to get a quote for the policy and on the application. Bobkowski died from an aortic aneurysm. Experts differ on if that could be linked to sleep apnea.​

Snoring may or may not be sleep apnea. It is when the airway closes, and the individual stops breathing that sleep apnea may be the problem. The bigger symptom (problem) is if the person is constantly waking up from it. Either way, no one knows until a sleep study test has been conducted.

Can anyone explain what sleep apnea has to do with an "aortic aneurysm"? It sounds as if the life insurance company is using something unrelated (post claim underwriting) as an excuse to deny a claim.

And finally, who did the medical part II of the policy. The company is talking about questions "online". Was this an electronic ap and sale?

I keep lecturing the agents that I know that clients should never avoid having a paramedical. A paramedical costs the insured nothing. This brings a knowledgeable third party into the medical underwriting part of the process and gives the beneficiary another layer of protection against this sort of claim denial.

I will never watch a USAA commercial, featuring what appears to be veterans, the same way again. You would think where there is any benefit of a doubt, it would go to a veteran. I expect anyone competing with USAA to keep a copy of that story handy.

Just started reading this thread so if someone already stated this sorry

The death does not have to be related to what they are contesting. He could have died in an accident and his application answers would still be questioned.
 
Hey jack, I think you missed my sarcasm in the post.

And you missed mine in the paragraph about you, your friends, and neighbors pooling your money to lobby your legislators.
:laugh:

I was being sarcastic toward Robert Barney who had given the impression that carriers are merely there to collect premiums so they can later underwrite & deny claims

I got no such impression.

The death does not have to be related to what they are contesting. He could have died in an accident and his application answers would still be questioned

Yes, we did cover that.

You might also be interested in our discussion about Fraud and the Contestability Clause.

https://insurance-forums.com/commun...ntestability-clause.95940/page-3#post-1272181
 
USAA is correct in this case. *Disclosure: I used to be an underwriter for them, but left just prior to this policy being issued.

It's always better to heir on the side of caution and admit history, even if you do not think it's pertinent. He passed away within the contestability period and the material misrepresentation was discovered.

This has NOTHING to do with 'taking care of veterans'. That's just a side story to drum up emotional sympathy, but has zero to do with the case. Every applicant has to be treated the same, whether with USAA or not. If a policy is within the contestability period (and it was in this case), they reviewed the claim (and should) just as it would anyone else.
 
How do Insurance Companies get medical records after they are thrown out? Usually doctors keep the records 7 years.
 
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