Prescription Drug Use and Material Misrepresentations

The rise in prescription drug use in the United States has had a direct impact on life insurance claims.  The Center for Disease Control recently released figures, from May 8, 2013, that indicate that over 22,000 deaths occur from pharmaceutical drugs each year, of which over 16,500 are related to opioid analgesic overdoses.

Standard insurance applications typically include questions such as, “Are you, or any person proposed for insurance, currently taking any medication prescribed by a physician?”  Failing to disclose some medications, particularly ones contributing to an insured’s death, are fairly clear cut material misrepresentations.  However, certain arguments are still available to the policy holder.

For example, Trief & Olk successfully seized upon the aforementioned policy question by highlighting the word “currently.”  In a situation where an insured was prescribed medication which, when taken as directed, would run out prior to the application’s submission, a colorable argument existed that the insured was not “currently” taking any medication.  Using this approach, Trief & Olk was able to secure a settlement on an opiate overdose claim where other firms had previously failed.