Life Insurance Policies with Vanishing Premiums – and Vanishing Policies

Trief & Olk Victorious on Appeal in $3 Million Life Insurance Case

UPDATED NOVEMBER 11, 2020: Trief & Olk defeated a second challenge to its successful $3 million verdict against William Penn Life Insurance Company of New York (“William Penn”).  On September 15, 2020, the New York Court of Appeals (New York’s highest court) rejected William Penn’s motion to hear its appeal of the decision of the appellate court issued in February 2020, cementing Trief & Olk’s trial victory.

 


 

Trief & Olk successfully defeated a challenge to the $3 million verdict it had obtained in a suit brought against William Penn Life Insurance Company of New York (“William “Penn”), relating to William Penn’s denial of the claim for payment of the proceeds under two policies insuring the life of Jhonny Jaar.  William Penn argued that Mr. Jaar had made material misrepresentations on the applications for his policies regarding his history of smoking and drug use, and that they would not have issued the policies if they had known about this alleged behavior.

 

The parties tried the case without a jury in June 2018 before Justice Francis A. Kahn III of the Supreme Court of the State of New York, Bronx County, who issued his memorandum opinion on October 22, 2018. You can read the opinion here. Justice Kahn found that William Penn did not meet its burden to establish that Mr. Jaar had made any material misrepresentation on the life insurance applications and therefore was obligated to pay the $3 million (plus interest) owed under the terms of the policies.  William Penn appealed that determination.

 

In an opinion issued on February 27, 2020, a three-judge panel of Appellate Division of the First Department, unanimously affirmed the findings of Justice Kahn, ruling that William Penn’s challenges to the trial court’s evidentiary rulings had no merit.  In particular, the Court found that the testimony of William Penn’s forensic expert, Dr. Michael Baden, was unreliable because he based his opinion in part on hearsay evidence – purported statements of Mr. Jaar’s widow – that is not typically relied upon by the medical profession.

 

If you recently lost a loved one who had life insurance for which payment was denied or which you fear may be denied, the life insurance attorneys at Trief & Olk are available to answer your questions and represent you if life insurance has been denied. Feel free to consult our website for examples of the many successes we have had when life insurance companies denied payment or call us directly to discuss how we may help you.

New York Life Insurance Claim Lawyer

If You Want Your Children to Receive Your Life Insurance Proceeds, Designate Them as the Beneficiaries, Not a Romantic Partner, Friend, or Relative

How to Choose Your Beneficiary Whether You are Married or Unmarried

When a married person with children obtains life insurance (whether purchasing it directly or receiving it as a benefit of employment), the usual practice is to designate the spouse as the beneficiary, assuming that any life insurance proceeds would be used to support the surviving spouse – and the children.  When an unmarried person with children obtains life insurance, however, it is less clear how to ensure the children’s financial interests are protected. Many people choose to designate as the beneficiary a close relative or a romantic partner (who is not the parent of the children), assuming this person will honor the wishes of the insured and use the insurance proceeds to support the children, especially if any children are under the age of 18.

Based on our experience at Trief & Olk, however, we have seen many cases where this approach ends up with unintended consequences.  Rather than giving the money to the children (or their legal guardians, if they are under age 18), the third party who was designated as the beneficiary has decided to keep the insurance money for himself/herself, despite knowing that this result is not what the insured intended.  In such situations, there is little the children can do to challenge the result.

What Do Life Insurance Companies Use to Determine Who Should Receive the Proceeds

Life insurance companies base the determination of who should receive the life insurance proceeds on the person formally designated as the beneficiary (or beneficiaries), regardless of what might be expected or what might be indicated in the person’s will.  Thus, if the insured’s romantic partner (or former partner) was the designated beneficiary listed on the insurance application, the children cannot argue after the death that the insured really wanted the children to receive the funds.

The fact that one might expect an insured to leave the money to support their children or has provided for the children in their will does not change how the life insurance proceeds are paid out.  The life insurance company’s determination will be based on the identity of the designated beneficiary, regardless of how unfair this may seem.

To avoid this unfortunate outcome, the safest practice for unmarried individuals with children is to designate the children directly as beneficiaries.  If the insured wants the partner/relative and the children to share the proceeds, they can be designated as joint beneficiaries, splitting the proceeds however the insured would like (such as 50% for the partner and 50% for the child).

If you have a dispute relating to life insurance proceeds, the life insurance attorneys at Trief & Olk are available to answer your questions and represent you if life insurance claim has been denied or is disputed by another purported beneficiary.  Feel free to consult our website for examples of the many successes we have had relating to payment of life insurance benefits or call us directly to discuss how we may help you.