. .

Invest in your success.
JVRA helps lawyers win cases by providing critical information you can use to establish precedent, determine demand and win arguments.

ARTICLE ID 159216

$________ - Life insurance obligation - Agent completes application and receives first month's premium - Decedent suffers fatal heart attack approximately three weeks later and dies four days following infarct.

Ocean County, New Jersey

In this life insurance obligation case, the decedent and his wife met with an agent of the defendant life insurance company for the purpose of purchasing life insurance policies on 6-17-03.The agent was a neighbor and friend who had just been hired by defendant. This was to be his first sale. The agent completed applications for term policies of $________ for the husband and $________ for the wife and collected a check representing the first month’s premium. It was explained that the applicants were required to submit to a subsequent medical examination and that other data would be collected which might result in a premium increase or a decision to decline to issue a policy.

On 6-26-03, a consumer credit history was ordered by the defendant insurance company and was forwarded to their underwriting department. It indicated that the plaintiffs had previously sought protection in bankruptcy court. On 6-29-03, the medical exams were conducted and the resulting information was forwarded to the defendant’s underwriting department. On 7-10-03, the husband suffered a massive heart attack and was placed on life support. Upon learning of the husband’s condition the same day, the agent/neighbor made an immediate inquiry of the defendant’s home office as to the status of the application. He was advised that the application was "pending".

On 7-14-03, life support was withdrawn and the husband died. The wife contended that upon returning home from the hospital after her husband’s death she discovered, in that day’s mail, a letter from the defendant addressed to her husband. The letter, which was sent via ordinary mail, was dated July 3, ________ and stated that the defendant had decided to decline to issue a policy based "upon information received during underwriting". Several weeks later, the defendant indicated the specific reason for the denial was due to the applicants’ prior bankruptcy filing.

The wife submitted a claim to the defendant asserting that "temporary" or "conditional" coverage arose immediately upon submitting the application and remained in place when her husband died. Therefore, she was entitled to the $________ as the beneficiary of the policy. The defendant denied the claim, contending that no temporary coverage ever arose and that if it did, the decision to decline the policy, purportedly made on 7-3- 03, would have terminated any such coverage.

The plaintiff contended that the defendant’s underwriting criteria would not ordinarily result in the defendant declining to issue a policy and maintained that defendant’s position should be rejected. The plaintiff filed suit alleging: (1) temporary or conditional coverage arose under the "reasonable expectations doctrine" established by Allen v. Metropolitan Life., (2) Public Policy requires that to be effective, an insurer must demonstrate a decision to decline coverage was actually received by an applicant along with a premium refund before a claim arises, (3) the claim for life insurance benefits arose when the insured suffered "mortal injury" on the 10th, not the actual death on the 14th, (4) irrespective of whether the defendant provided timely notice, it was precluded from denying coverage based upon an applicants’ bankruptcy filing because it could not establish that it relied upon reasonably established underwriting criteria in doing so.

Furthermore, the plaintiff alleged that Primerica’s purported refusal to issue a policy was really a hasty and wrongful attempt to avoid liability after learning of the insured’s imminent death and therefore, was a violation of the New Jersey Consumer Fraud Act. The defendant denied these allegations and disputed plaintiffs’ interpretation of the applicable law.

The trial court granted partial summary judgment in favor of the plaintiff, ruling that temporary coverage did arise when the application and premium were submitted. The court ruled that it was for a jury to determine whether the defendant relied upon established underwriting criteria when refusing to issue a policy due to bankruptcy and whether the defendant "effectively" terminated the temporary coverage by proper notification to the insured. An unresolved legal question remained as to what constitutes "proper notification". The plaintiff maintained that although there appeared to be no NJ case directly on point, the existing out of state authority and the trend among most courts supported plaintiff’s position.

The case settled at trial for $________.

To read the full article, please login to your account or purchase

5 ways to win with JVRA

JVRA gives you jurisdiction-specific, year-round insight into the strategies, arguments and tactics that win. Successful attorneys come to the table prepared and use JVRA to:

  1. Determine if a case is winnable and recovery amounts.
  2. Determine reasonable demand for a case early on.
  3. Support a settlement demand by establishing precedent.
  4. Research trial strategies, tactics and arguments.
  5. Defeat or support post-trial motions through past case histories.

Try JVRA for a day or a month, or sign up for our deluxe Litigation Support Plan and put the intelligence of JVRA to work for all of your clients. See our subscription plans.