Denial of Whole Life Insurance Policy

I am often contacted by potential clients who are surprised to learn that the whole life insurance policy (that their family member had been paying for over many years) allegedly lapsed shortly before the insured’s death.

The lapse allegation often stems from the fact that the cost to maintain the policy increases as the insured ages. The premiums can become quite high when the insured reached their 70s or 80s, for example. Often insurance sales people do not adequately explain that monthly premiums the insured has paid for years or even decades will not be nearly enough to cover the increasing premiums. In fact, I have personally had an insurance salesperson tell me that premiums do not increase on a particular whole life policy when that was actually untrue.

When the increasing “cost of insurance” eclipses premium payments, the policy’s cash value will be reduced. If a loan was taken out against the cash value, the loan payments (including interest) will further erode what remains of the cash value.

When the insured is on death’s doorstep they may not be in a position to handle their finances and, in particular to, replenish the case value in their whole life policy such that it remains in force.

This confluence of factors leads to the insured potentially losing their life insurance coverage at the very worst time i.e. shortly before their death.

However, there are laws in place to potentially protect beneficiaries from suffering from this ill-timed and unfair consequence.

If your loved on died within close proximity to their whole life insurance policy, or term life insurance policy, allegedly lapsing, it is highly recommended that you contact me at 612-808-9082 or msanti@santicerny.com. Do not simply believe the life insurance company when then allege that the policy has lapsed and there is nothing that can be done. I have changed their stance many, many times.

Do Life Insurance Companies have to Pay Interest on Death Benefits in Minnesota?

Yes, under Minnesota Statutes 61A.011 life insurance companies must pay interest on death benefits.

What rate of interest are life insurance companies required to pay?

The “insurer shall pay interest at a rate not less than the then current rate of interest on death proceeds left on deposit with the insurer, computed from the insured's death until the date of payment... If the insurer has no established current rate of interest for death proceeds left on deposit with the insurer, then the rate of interest to be paid under this subdivision shall be the rate of interest charged by the insurer to policyholders for loans under the insurer's policies.  Minn. Stat. §61A.011 Subd. 1.

Enhanced Interest Payment:  “if an insurer admitted to transact life insurance in [Minnesota] does not pay within 60 days after receipt of due proof of death of the insured, the proceeds or payments under any policy of life insurance, individual or group, such insurer shall pay interest at an annual rate that is two percent more than the rate of interest provided for in subdivision 1. Such interest shall be computed from the date of the insured's death until the date of payment, on any such proceeds or payments payable to a beneficiary residing in this state, or to a beneficiary under a policy issued in this state or to a beneficiary under a policy insuring a person resident in this state at the time of death. Stat. §61A.011 Subd. 2 [emphasis added]. 

Which life insurance companies does this rule apply to?

Any insurer admitted to transact life insurance in Minnesota must pay post-mortem interest.

What type if life insurance policies must pay post-mortem interest in Minnesota?

Individual and group policies.

Minnesota life insurance attorney Mark Santi holds life insurance companies accountable for failing to pay the correct interest due on death benefits.

Contact Minnesota life insurance lawyer Mark Santi if you are experiencing difficulties obtaining life insurance proceeds.

Life Insurance Claim through Employer Denied? Contact an Experienced Life Insurance Attorney Immediately!

If you or your loved one purchased life insurance through an employer, the Policy is likely governed by the Employee Retirement Income Security Act (ERISA).  ERISA is a specialized area of the law.  Specific and strict rules will govern your efforts to secure payment of the death benefits and one misstep could mean that the death benefits are forever lost.

The Typical Scenario:  The beneficiary of a life insurance policy files a claim after the death of their loved one.  The insurance company requests additional documentation and information.  Ultimately, the life insurance company sends a letter denying the claim for one or more reasons.  The denial letter indicates that the denial can be appealed within a certain timeframe (typically 180 days).  If the deadline is missed, the ability to pursue life insurance proceeds will likely be lost forever.  Some beneficiaries forget to file an appeal, some file it incorrectly, and others choose not to file an appeal because they are intimidated or believe that the insurance company will not reverse its decision. 

It is essential to consider that the life insurance company does not have the beneficiary’s best interest in mind.  Rather, the company seeks to maximize profits and deny claims if at all possible.  Meanwhile, beneficiaries are likely not experienced with life insurance law and not in a position to know whether the claim denial was legitimate.  Our firm has successfully convinced many life insurance company’s to reverse their decision.  Candidly, sometimes it seems as if the life insurance company’s are betting that the beneficiaries will not be able to located skilled counsel in this niche area.

The Dangers of Filing your Own Appeal:  Beneficiaries who file their own appeal are navigating a minefield.  Life insurance law is complicated and ever-changing.  Many beneficiaries will not be able to formulate their best arguments. 

Even more concerning is that ERISA law provides a very deferential standard to most life insurance companies.  The Court will only consider what information the life insurance company had at the time it decided the appeal and will only overturn the life insurance company’s decision if it was “arbitrary and capricious.”  That standard is favorable to the insurance company so the beneficiary has a high hurdle to overcome. 

Additionally, because the Court will only consider the merits of the decision given the information at the hands of the insurance company at the time the appeal was decided, it is essential that the beneficiary put forth the entirety of their evidence, and their best arguments, at the time of appeal.  There will not be an opportunity to do so later, and an attorney can likely not remedy mistakes once they have been committed at the appeal stage.

Conclusion:  Your loved one faithfully paid life insurance premiums out of their paycheck every month – often for many years.  It is an injustice if their desire to provide for their loved ones posthumously is jeopardized by careless handling of an ERISA appeal.  As such, it is important to locate a highly experienced life insurance attorney as soon as possible upon claim denial.   

Minnesota Life Insurance Attorney Mark Santi files a Complaint against the Prudential Insurance Company in the United States District Court for the District of Minnesota

Life Insurance Attorney Mark Santi-a founding partner of Santi Cerny, PLLC-has filed a Complaint on behalf of a client against the Prudential Insurance Company of America.

The Complaint was filed after Prudential denied the client’s claim for benefits under an employer-sponsored group policy. The Complaint alleges violations of ERISA and Breach of Contract. 

Prudential will have the opportunity to admit or deny the allegations in the Complaint and the case filings may be followed via the PACER Case Locator.

If you are a beneficiary who has been denied life insurance proceeds of $100,000 or more, contact Mark Santi immediately at msanti@santicerny.com

Minor Beneficiary to Life Insurance Policy

Often clients are surprised to learn that their minor children cannot receive life insurance proceeds directly. When completing the life insurance claim paperwork you will notice (or you will be informed by the life insurance company) that court-appointed guardianships must be established in order for a minor beneficiary to receive their proceeds.

This is an unfortunate hurdle for a family that is already dealing with the loss of a loved one, but the applicable law is in place to protect the minor, and to honor the wishes of the life insurance policyholder who passed away.

We try to alleviate the client’s burden by navigating them through the court system. Often fees can be paid through the guardianship’s protected accounts once they are established.

Please feel free to reach out to Mark C. Santi, Esq. if you need assistance collecting life insurance proceeds for a minor.

How do I Research the Financial Health of a Life Insurance Company?

Various ratings agencies assess the financial health of life insurance companies. While these ratings provide no guarantee (recall the sub-prime market crash of 2009-2009) a sub optimal rating can be a red flag and reason to consider a different life insurance company.

Ratings agencies can be accessed using the links below but most require you to create a free account.

• Moody’s

• Fitch

• AM Best

• Standard & Poors

How do I Determine if A Company is Licensed to Sell Life Insurance In Minnesota?

The Minnesota Department of Commerce regulates life insurance companies in Minnesota. The Department can be reached at 651-539-1600 ( 1-800-657-3602) or via email at consumer.protection@state.mn.us to verify license status.

What Laws Govern Life Insurance Policies in Minnesota?

Predominantly, Minnesota life insurance policies are governed by Minnesota Statutes, Minnesota Rules, and case law.

Minnesota Statutes Section 61A found HERE governs life insurance. It falls within the statutes governing insurance in general which run from 59A through 79A. Section 61A governs a wide variety of topics such as contracts, non-forfeiture laws, replacement insurance and policy illustrations.

Minnesota Rules. The Commissioner of the Department of Commerce is authorized to promulgate rules relating to life insurance and has done so. For example, Minnesota Rules Section 2700.3200 found HERE details unfair and deceptive practice in relation to life insurance.

Case law. Minnesota’s Supreme Court and Court of Appeals have issued opinions pertaining to life insurance policies and construing applicable law.

If you are involved in a dispute relating to a Minnesota life insurance policy, you should strongly consider consulting with an experienced life insurance lawyer like Mark C. Santi.

Life Insurance Claims After Policyholder Dies From COVID-19

With hundreds of thousands of tragic and untimely deaths resulting from the COVID-19 pandemic, we will naturally see related life insurance claims. While life insurance companies tighten their belts during the current financial turmoil, there is a concern that they will frivolously deny more legitimate claims than normal.

Common reasons for denial include alleged misrepresentations on the policy application or non-payment of premiums. Imagine, for example, that a policyholder with COVID is admitted to the Intensive Care Unit for several months but ultimately succumbs to COVID. Will his or her insurance company deny a claim for death benefits due to non-payment of premiums?

In our experience, insurance companies utterly lack compassion, and will do whatever it takes to protect their underwriting profits. As such, you may need an experienced Minnesota life insurance lawyer to litigate your claim in court.

Who Regulates Life Insurance Companies in Minnesota?

The Minnesota Department of Commerce regulates life insurance in Minnesota. They provide a resource page HERE.

While the Commerce Department may be able to assist you with issues pertaining to your life insurance claims it is important to understand that they do not serve as your attorney. If you file a complaint with the Commerce Department, that Complaint will almost certainly be viewed by your adversary and you may inadvertently make statements or admissions that are against your interest.

Also, filing a complaint with the Commerce Department does not toll any statutes of limitation applicable to your claim. Finally, even if your complaint is meritorious, the Commerce Department has limited resources and may not be able to give your matter the attention it deserves.

In light of the foregoing, its is recommended that you consult with an experienced Minnesota Life Insurance attorney like Mark Santi.

Did my Deceased Family Member Have a Life Insurance Policy?

Many millions of dollars in life insurance proceeds go unclaimed every year. If your loved one has passed away, you need to research whether they had life insurance in place. Money may be the last thing you want to think about while grieving a loss, but you owe it to your loved one to spend the time to locate any applicable policies. They purchased the life insurance because they loved you and wanted to provide you with the gift of financial security upon their passing.

Even if you are not accustomed to handling finances, there are a few simple steps you can take to determine whether there was any life insurance in place:

1) Review the decedents files. Are there statements from insurance companies, or check registers reflecting premium payments?

2) Contact your spouse’s employer or former employer. Often insurance policies are offered by employers.

3) Contact your spouse’s estate planning attorney, financial advisor, and accountant. These individuals may have knowledge of a life insurance policy.

4) Review tax returns. Certain insurance policies will accrue taxable revenue that may be reflected on a return.

5) Check online resources. The State of Minnesota provides a policy locator HERE.

These are just a few examples of how to locate your loved one’s life insurance policy. If you have difficulty collecting on the life insurance policy once it is located, you may need to contact an experienced Minnesota life insurance lawyer.

How to Recover Denied Life Insurance Claims in Minnesota

Did your loved one pay life insurance premiums for years or even decades? Were you relying on life insurance proceeds to support your family or fund your retirement? Has a Minnesota insurance company denied your claim? Unfortunately, this occurs all to often.

Life insurance companies promote themselves as being ‘there for you,’ providing peace of mind, and affording financial security to your family. They say all of the right things to sell you their expensive and sometimes complex insurance products. Sometimes insurance is sold to you by a financial advisor or purchased as a component of a more complex product such as a Variable Universal Life policy. Sadly, when the time comes for a policyholder or investor to collect on life insurance claims, they all to often see a different side of their ‘trusted’ insurance company. They find a greedy and brutal adversary who will go to great lengths to avoid paying benefits.

You will likely need an experienced Minnesota life insurance attorney to file a claim for breach of contract and potentially breach of fiduciary duty.

If you were denied payment on a life insurance policy of $100,000 or greater, contact Mark Santi immediately.