The ends do not justify the means morally or legally.

@mythago:

or you just must be so naive to realize that people lie. i dont think one response you have made would ever give this company the benefit of the doubt... oh wait cause they are an insurance company and they are all bad.

1. The insured is dead. The insurance company must prove that the deceased was aware of the Hepatitis prior to the activation of the life insurance policy.

2. The Life insurance policy, in accepting money, also went into a contract with the man. Fraud is tied to a specific action. As he did not die from the disease, the FRAUD never occurred. You can NOT anticipate lost revenue here without proving #1 first. They also must publicize the additional markup they would have charged for the disease...etc.

I think the denial letter will clarify the insurer's position. In the end, they'll settle.

@gttim:

So why only check if they are lying when there is a claim?

But they don't usually tell the general public that. I wonder how many people are paying for policies that will never pay because they have a chronic condition. I just happened to stumble across the fact, even my insurance agent was not aware of the clause.

I know it's been a long time but remember when we used to care about that?

I work for a very honest insurance company. We have no problem paying any claim, unless you lie on the application. We rescind the policy and refund the premium to the estate.

How did they know he had Hep C? On any death claim you get the death certificate and a medical history. The Hep C would pop up on the history very clearly. Just because he got shot does not mean they would not do a standard investigation.

Do not lie to an insurance company.

Remember that a life insurance company generally only gets to challenge a claim within the first two years (called the contestability period). Should you die within that period, then the company will investigate. Generally, this will include getting the death certificate/autopsy report and getting a statement/medical records from your primary care physician. Should the autopsy report show a pre-existing condition that your medical records confirm you knew about at the time of the policy and failed to properly disclose, then you will be SOL with any insurance company and properly so. If the condition was not diagnosed at the time of the policy approval, then your claim will be paid.

To all of those defending the insurance company. Their claim only makes sense if the cause of death is Hepatitis, otherwise any claim could be denied for some reason. We all have some pre-existing condition that we don't know about depending on how loose your definition is.

@nacoran: How do you give someone hepatitis bright boy?

The crux of this case would be proving that this man had been treated/prescribed/consulted or diagnosed with hepatitis c prior to signing on the dotted line.

BTW-Hep C is usually co-morbid with IV drug abuse and is treatable with a ribovarin protocol. Hep B is not treatable but preventable via an inoculation series. Hep B is bacterial, spread fecal/oral. About 1/3 of the adult US population has been exposed. It is not a chronic illness after the acute phase of infection.
Hep B is usually spread as a food borne illness when farm workers crap in the fields when picking crops.

If any ONE of these "pre-existing" conditions didn't exist, there wouldn't be a law suit going on now.

The longer they delay, the longer the money is making money for them directly as interest or as investment and also the more likely it is they can settle out court for less. Finances can get tight very quickly and they hope this will encourage a willingness to barter.

Having sold life insurance in the past (10 years before changing careers), I have seen desperate agents lie on an application that they KNEW would be turned down. I've seen clients lie when they felt there was a medical condition that would get the policy rated at a higher premium or turned down all together. Those things are FRAUD and will void a life insurance contract.

Case in point, I refused to write my MIL because she had health conditions that would prevent a policy from being issued. Instead, I offered her a policy that was a guarenteed issue but, had a high premium and, if she lived longer than 7 years, she'd have paid in more than the death benefit. It's not a good deal but, she wasn't a good risk.

Along come another agent and writes here a standard policy that was issued at standard rates. The only problem was, someone lied about her health history. The contract was essentially void. Long before she died she let the policy go for non-payment so I never got to see the end result.

If the client had Hep. C and failed to disclose that information to the insurance company or, if he disclosed it and the agent failed to write it down on the application signed by the insured, then it's a case of fraud and, no matter the mechanism of death, the claim won't be paid.

Be aware that it's more important to be truthful on an insurance application and be certain you have coverage rather than lie and find out that you don't have a legitimate claim.

No, you're assuming. I'm going by what was said when the documents were released: "identifying information has been redacted to protect covert identities."

Again, no plots were foiled by torture. Torture doesn't produce useful information - because people will say anything to stop being tortured. Torture makes people unable to distinguish truth from fiction - they don't even know they're lying.

You know, kind of like you.

Being murdered is the same risk for both and therefore might not even figure into the rates. So, by not declaring the Hep C on the application denies the insurance the right to be compensated appropriately for the risk involved.

Yes, that or he did know and he in fact developed Hepatitis C after he filed for his claim.

It would be better than the same outcome.

If the guy died of Hep C then yes - decline the claim. If not dead from Hep C - They have to pay out. Everyone who is insured by Settlers should cancel their policies post haste and move them across to AIG.. Oh wait...

"Make sure you have an insurance agent you can trust"

How do you do that?

Also, I've never understood how more insurance claims people don't get killed, particularly health insurance.

@Coach Cal Is My Dream Weaver: I agree 100%. A crime is a crime. Motavation does not matter. If I kill you because I want to steal from you, or if I kill you because I don't like your race, religion, or whatever, you're still dead either way.

@mythago: Couldn't have said it better my self. Makes you angry, huh?

@ThinkerTDM: Anything to save some money! Welcome to capitalist america!

Yes, everything that doesn't go exactly as you think it should can be blamed on that evil, evil institution of capitalism. Curse that rotten George Bush!

It probably wasn't every insurance company, but I've heard from people who worked in Doctor's offices who have had to contest claims numerous times in order for them to be accepted.

@wardawg: No, but his wife is, and funerals aren't exactly cheap.

@snowmoon: That's my initial suspicion as well. If the Hepatitus was never disclosed, then the insured committed insurance fraud and the policy would be rescinded. However, the premiums should be returned. I work in insurance claims (not life) and have seen this scenario before. Dunno if the insurance company returned the premiums in this case, though. The shitty thing is if they're arguing that they can keep the funds. I read the Complaint, but not the denial letter. Likely the insurance company will settle. It's not worth it to litigate unless there's already good law in its favor.

@hypochondriac:

If he did not disclose pre-existing conditions, then why do insurance companies continue to take premiums from liars, sometimes for many, many years and then deny their family benefits as soon as a claim is made?

Don

I have to call shenanigans on this one. The agents who sell life insurance are almost always independent business owners, not actual employees of the company.
Any life insurance company operating in the manner you describe would find itself sued out of existance or have all its policies replaced by reputable companies within a very short time.

@johnva:

Your opinion is law in several states lol. So your opinion is pretty on the mark.

Insurance isnt the problem, plenty of companies are here to do the right thing. It the managers/execs that want to reduce cost thats start denying claims for trivial reasons. They deny a larger number hoping people will not understand enough to fight the decision, and the sad part is it works.

Make sure you have an insurance agent you can trust to help you when you ahve a claim. They can make a company change a decision with a lot less effort than the insured. Indepent Agents have much more flexibility than captive agents.

And snowburnt, you're assertion that health insurance companies reject EVERY claim is plainly false. I've personally submitted health insurance claims before, and had them processed and paid with no problems. I'm not saying they never improperly reject claims, but they certainly do not reject EVERY claim, as you assert in your comment. I also suspect your claim about the overhead is incorrect, but I don't have the time to research it.

@johnva:

Some states have laws for what you are saying. That a policy cant be rescinded unless the reason for loss would have caused the policy/claim to be rescinded/denied. However, very few states have laws like that.

@Irashtar:

I worked for a life insurance company for a while:

The only way the hep diagnosis could invalidate the claim is if he had it before getting the policy and knew about it. Depending on the amount of coverage and the guys age they might not have required a blood test. If he knowingly lied about his condition on the application (which they then found out on the post claim underwriting), it would invalidate his entire policy because if he had told the truth he would have never gotten a policy to begin with and he committed fraud.

@Trai_Dep: Hey, that's not funny. My mom works in the "find ridculous reasons to deny claims" department of a major insurance company.

@heltoupee:

We know nothing about this case. If the husband got the policy after finding out he had hep then he obtained the policy through fraud and should have never received it in the first case and should be denied.

If, however, he either was infected after obtaining the policy or did not know he was infected when getting the policy, the policy is good and should be paid on.

@Gene Gemperline:

If he had hepatitis and KNEW it when getting the policy then its grounds for cancellation when the insurance company finds out because they would have never given it to him in the first place and only got it through fraud. IF, however, he had and it and DIDN'T know it, its a valid policy and the company should have to pay. Or if he got it after getting the policy he should still get paid.

Cripes. These assholes are worse than insurance companies that refuse to pay for hurricane damage by reclassifying it as "flood damage".

The insurance company is harmed. They could have denied him coverage, thus saving the money to pay off the policy. Or they could have looked at their tables and determined that Hep C puts him in a higher risk category and then charge him a higher premium in line with the risk.

oneanddone - I agree if he did not know at all (i.e., the condition was undiagnosed, then the company should pay out. But, if he had even one blood test confirming Hep C before he applied, then no payout.

@mythago:

Yes, I know what bad faith is and it works both ways. IF the insured answered that question incorrectly at the time of app and they would have never issued it/or at a greater premium, then settler's is correct. Underwriting is normally spurred from an answer at the time of application or from the amount of benefits that they were applying for. The insurer, in this case settlers, issued the policy in good faith that all questions were answered correctly at the time of app. (this is assuming since the article linked doesnt even have the denial letter or additional docs).

If the person above didnt answer correctly why shouldnt they have a right to go back. As stated above most of the time the insurerer only has two years to do this.(once again this is just assuming as we only have the legal doc submitted and no policy/app/denial letter to go from.)

If this policy was rescinded due to the hep c i can understand the denial as the policy would have never been issued in the first place. If they only denied it pre-existing and didnt refund the premiums then they are wrong and should pay alot more than the 25k imho.

Also, what confuses me out of the responses.. i go to the doctor and they tell me whats wrong. I know this now. How do you not know what is wrong with you if it has been diagnosed. Do your doctors just right it on a paper and tell you to have a good day? Sounds like people need research their physicians a little better if that is the case.

@meske: The requirement for a medical exam varies somewhat. For example, if you are young and the amount of the policy is relatively small the insurer might not ask for an exam.

My employer offers life insurance and if you elect coverage below a set amount, called the 'shall issue' amount, you don't have to take an exam. However, the shall issue coverage is not an enormous amount of money and if you wanted more coverage than that you would have to submit to an exam. For example, if you wanted $100K in coverage: no exam. If you wanted $500K: exam.

@rbb: You missed an option: the deceased did not know that he had Hepatitis C and answered all questions truthfully. He did not disclose he had Hepatitis C because he did not know.

In that case, the bottom line is that he may have not qualified for coverage or for the premium he received, but through no fault of his own. If the insurance company can't be competant enough to evaluate potential policy holders accurately, that's their fault. They should pay out.

They would have to prove that he had Hep C before they started COVERING him. When did he sign on to this insurance, and is there a medical record prior to that date that says he had Hep C?

If he contracted it WHILE on the insurance, it doesn't matter, and they need to pay out.

All of this over 25k

I read an article on health insurance not too long ago. They reject EVERY claim initially, even claims that they know they will eventually process, so that they can keep the money in the bank earning interest for as long as they can.

Someone could verify this, but most of the overhead in healthcare is composed of people submitting and re-submitting claims and people rejecting claims

The alternative is better?

It's been proven that torture will only get someone to "talk". They won't tell you the truth, they'll only say what they think you want to hear. There was a guy that wrote a book (I forget his name now) he worked on more progressive interrogation methods that involved getting into their head rather than completely destroying their psyche.

Can you imagine the damage that that garbage can do to someone's mind? Would you trust the things that someone tells you after you've driven them completely insane?

I understand your point of view, but I don't agree with it. Mainly because I think it opens the door to abuse by insurance companies who could simply comb through people's health backgrounds, find some unrelated "excuse" for why the customer committed "fraud", and deny legitimate claims. I think the insurance industry would do this in a heartbeat if they thought they could get away with it. Remember the woman who had her cancer claims denied because she supposedly failed to disclose something totally minor like hay fever?

Slowly they figured out there was an even BETTER way to make money: have very low standards for who you insure, and take premiums from lots more people. Invest the premiums. Then, when people file claims, start to investigate whether you should pay them at all, and stall payment on valid claims.

Big's friend clearly has a future at Asshole Mutual Company as a claims underwriter.

You are either naive or you work for an insurance company if you think that only people who commit fraud "never have a problem". Do you know what a bad-faith claim against an insurer is?

@hypochondriac: It's possible that he didn't know that he had Hepatitis C. Generally, you don't show symptoms for 20-30 years and it is not a disease that is routinely tested for.

It's now 18 months later, and your family is threatened is about to be bankrupted by funeral expenses and medical bills.

Facing a payout of $500k, the insurance company does the reasonable thing and double checks that everything is on the up and up. At this time, they discover your attempt to defraud them (and that is exactly what you have done) and deny your claim.

If you attempt to defraud someone for $500k and it isn't discovered right away, why should you be rewarded? Are bank robbers allowed to keep the money if they make it out the door with it?

If you don't think this is fraud then consider this: While you were engaged to your (now) widow, she tells you she is pregnant. Of course, she neglected to mention that one time she got really drunk with some friends while you were away on business. Two years later you try for a second child. Oops, you're infertile, have been since you were born. You're welcome Trojan. Are you really saying you should have known better?

Oh well. The stress of the whole situation has ruined your latest attempt to quit smoking. Maybe a backpacking trip through Europe will clear your head...

Nope...I quit, i am not buying any sort of insurance...

There, fixed that for ya!

But, I believe the questions are relevant. Say the deceased answered the question in the affirmative that he had Hepatitis C when he applied for the policy. The insurance company would either decline the application or charge the deceased more because he is a higher risk.

If he lied on the form, then he defrauded the insurance company. The insurance company loses money because they did not have a chance to deny the policy or be compensated at a higher rate due to the risk.

Bottom line: If the deceased never could have qualified or should have been paying higher rates for the policy because of omissions on his part, the insurance company should not pay out.

There's the link. Considering large portions of the memos were redacted, crashfrog, you're assuming that you now what was redacted. The portions that were not redacted indicated specific threats (it's clear from context they were named later, in the redacted sections), and CIA statements since the memos were released indicate specific terrorist plots were foiled.

Trai_Dep, which "laughably overblown" threats are you referring to? You can't possibly be referring to those threats kept classified by the Obama administration, since apparently they're classified information. Wouldn't want to release anything that might justify the use of waterboarding.

CIA's opinion: [hotair.com]

The casino example would be taking your bet off of the roulette table after the wheel stops.

@arras: Yeah, this is so common an occurance that insurance is right up there with the Hawaii Chair. Billy Mays is the insurance industry spokesman.

I would say it depends on the contract signed. If Curtis McCraw had to disclose any preexisting medical conditions and didn't, he might be breaking the contract.

If he is breaking the contract by not reveling preexisting conditions it doesn't matter how he died. The company won't and shouldn't pay out

Quote:
Dying of cancer, Thomas Amschwand did everything he was told to make sure his wife would collect on the life insurance policy he had through his employer.

... But Spherion Corp., the temporary staffing company where Amschwand worked, told Amschwand-Bellinger she would not receive any of the $426,000 in benefits she believed she was due. When she went to court, Spherion succeeded in getting her lawsuit thrown out. The Supreme Court on June 27 refused to review the case.

Amschwand-Bellinger received a refund of the few thousand dollars in insurance premiums she and her husband dutifully had paid. The total, she said, would not cover the costs of his funeral.

... Federal appeals courts, interpreting Supreme Court decisions dating to 1993, consistently have said companies that offer health, life and retirement benefits under ERISA cannot be sued for large amounts of money, or damages. Instead, they can be sued only for typically smaller sums such as Amschwand's insurance premiums.

Several federal judges have bemoaned the unfairness even as they have felt constrained to rule in favor of employers.

... Spherion's decision to deny benefits to Amschwand-Bellinger turned on an odd set of facts. Spherion, which employs about 300,000 people, switched insurers after Thomas Amschwand was diagnosed with a rare form of heart cancer. The new policy did not take effect until an employee worked one full day. Spherion never informed Amschwand of the requirement.

Amschwand asked repeatedly whether there was anything else he needed to do and was told no. He asked that the new policy be sent to him. Spherion never did so.

He died without returning to work. His widow said he easily could have worked a day if that was what it took to activate the new policy. Spherion could have waived the one-day-of-work provision, as it did for other employees but not for Amschwand.

[end quote, emphasis mine]

It's sickening.
They had no problem taking his money for months without saying a word; they had no problem lying to him repeatedly about what he needed to do; they had no problem waiving the provision for other employees; but when it comes time to pay the claim, "Meh, we'll just give you your money back."

In the Settlers story, it seems to me - as others have said - that they'd need to prove that (1) he HAD hepatitis at the time the insurance policy was opened and (2) he KNEW he had it. (I have a friend who had a blood transfusion in the 80s and didn't find out she had contracted hepatitis from it until the mid 2000s.)

@NoWireHangers: Finally a real answer for that pesky "Mary Jo Kopechne" issue.

* By the way, thanks for being part of the tinfoil hat brigade that let the TSA steal my water bottle and toothpaste. And rip the bottle of mother's milk from the screeching infant sitting next to me on my transcontinental flight. Much appreciated!

I think if it's that big of a deal that they are going to deny a claim over a non-disclosed condition, they better make for damn sure both of you know everything about you. If a full physical is required then so be it.

@Jack Doyle: @Sockatume:

I would agree that is probably the angle they are taking, not that I agree with it. It should be very easy to look at a MD report to see when he was first diagnosed with Hep. C

In response to another reply, not all life insurance plans require a physical/blood test. Those are usually required when you are applying for a huge amount.

@Shoelace: Administrative overhead.

@bigroblee: It's not entering the complete URL I'm pasting for some reason. If you search for "Dollar Tree offers to pay in full in slaying" it will be fir first result on Google. Sorry for multiple posts...

@bigroblee: Dollar Tree offers to pay in full in slaying [www.sfgate.com]

@animatedantmo: Yes, it did. After a lot of publicity, Dollar Tree backed down. Here's the follow up story; [www.sfgate.com] I remeber it pretty well, I live in Sacramento and Fairfield isn't that far from here.

@johnva:

Did you read the questions? You seem to know a lot about Life Underwriting. Are you a CLU?

@Yamunation: I have insurance, and have not once had trouble filing a claim for anything (auto, health, renters, etc). Seems that sometimes shit happens, and without more information, you cant really tell why.

This could only be true if the Hep C was bad enough that cirrhosis was already occurring. Lots of people have a chronic infection that either never progresses to cause much damage or does so very slowly. If the liver dysfunction was bad enough that clotting factors weren't being produced, the person would have been bruising from minor bumps.

And to whoever said that "hep c" thins your blood - this is just plain wrong - again, unless the disease is severe. Until then it shouldn't have any effects.

The Obama administration conveniently redacted the portions of the "waterboarding memos" that gave specific details of terror plots to be carried out against the US mainland that were stopped because of information gathered through waterboarding.

Also, waterboarding is good for low-life insurance companies.

A government bureaucrat can screw you just as easily as a corporate bureaucrat. The only difference is that you can complain to the government about a company; it doesn't work the other way around.

IF the insured did NOT disclose the Hep C and KNEW about it, the insurance company only has a 2 year contestability period from the issue date to find this out. After the 2 years is up, the policy cannot be cancelled unless premiums are not paid. The lawsuit document claims it has attached to it the contract, but it wasn't there. If the issue date is greater than 2 years ago, the insurance company has to pay up. If it is less than 2, if the insurance company can prove the Hep C was withheld from them AND he would not have been insurable, then the insurance company simply returns all premiums paid.

Settlers should lose their license to sell insurance for pulling this kind of scam.

This is totally unacceptable.

All this over a $25,000 insurance claim? Settlers is going to spend more than that on the fees they pay their lawyers to fight this.

@Yamunation: That's the reality of it, and it's fucking criminal.

Excuse the expletive, but damn does it get me hot under the collar. How is this shit even legal? Why? I'm just a naïve dunderhead, so maybe there's something I just don't get (And I'm sure someone 'round here will be happy to clear it up for me….), but it just reeks of bullshit all around. What a scam.

Insurance is a racket of an industry. All their executives should be jailed and have all their personal property seized under the same laws they use against drug lords.

@Yamunation: Ding.

@PSUSkier: Waterboarding has never been an accepted practice other than by the torturers that used it.

@snowburnt:

They can only do this if there's evidence of fraud or something material not disclosed. If you get that life insurance policy, and then die a year later of cancer that you've had for two years, and didn't disclose to the insurer, then they wouldn't have to pay out (although they might have to return the premiums).

Think about it: you get a $500k term life insurance for $20 a month. You die a year later. They say: no, never mind we don't want to cover you, here's your $240 back. We'll throw in 3% interest also.

If I get a claim with you, research me before you agree to cover me.

@snowmoon:

I understand and i am not saying that it is always the case. I know there is also time limits as well that the can do the underwriting after the fact. It would be intersting to see how long they had the policy. Either way this is a sad story.

We can all take comfort in the knowledge that when civilization collapses, insurance execs and agents will be the first ones eaten.

@squinko: No, only if they deny your claim because you never should have qualified for coverage in the first place.

They apparently found out he had an pre-existing condition and yet the premiums and policy still seemed to exist .

WTF , And they say these guys will need the next round of bailouts ie many insurance companies .

So there is a huge gray area between good faith on the buyer and the insurance company paying the claim.

I don't think it was Hepatitis, per Chuck Noblet it was syphilis:

Historically, syphilis is right up there with Germans. It wiped out the Romanovs, it decimated our fleet at Pearl Harbor, and of course, Fidel Castro impersonated Marilyn Monroe and gave President Kennedy a case of syphilis so severe that eventually it blew the back of his head off.

@snowmoon:

Why should it be forbidden? They ask certain questions in good faith at the time of the application and if these are answered correctly you will never have a problem. Only the people that answer in bad faith have problems with this process.

If a life insurance company denies your claim, they have to return all the premiums you paid? That seems too reasonable to be a real policy...

"post-claim underwriting"

Which IMHO should be forbidden.

post-claim underwriting

My take is the insurance company will cave after the lawsuit about to go to court. I never had life insurance but don't they make you get a physical to cover these problems before hand? By the way My father's insurance will test him for nicotine when he dies and if they find any we will get the smokers payout. It might even be if he is shot.

If the buyer did not disclose pre-existing conditions that may have made him ineligible then the coverage may have been voided after they discovered that fact.

So did they just deny it as a pre-x condition or did they take his policy away? If the Hep C was an underwriting question that was answered incorrectly and they rescinded based on that, then fine.. if they only denied it and never said he had a right to the policy i dont see how they could defend themselves in court.

In other news, studying Biology causes you to completely miss the point; news at 11 and weather on the 5.

NOTE: Yes, I know the victim was male, but it's a direct quote.

Not condoning the ridiculousness of this ruling, just maybe a bit of perspective on what the hell they're trying to pull.

I have a coworker who used to work for an insurance company, and man some of the fucked up stories she has told, cold blooded. Insurance corperations are some fucked up people

This is on par with/worse than the convenience store clerk whose family (read: daughter- she was a single mom) was denied her life insurance because she was killed as part of a "hate crime", which is not covered by the policy...

Anything to save some money! Welcome to capitalist america!