In November 2018, Trief & Olk prevailed after a judge trial in a suit claiming that William Penn Life Insurance Company had wrongfully denied $3 million in coverage. The life insurance company claimed that the insured allegedly misrepresented material information in the application for the life insurance coverage. The court found that the insurer had not met its burden of establishing that the insured materially misrepresented his medical and social history, awarding the beneficiary the full $3 million plus nearly five years in interest.
In 2018, Trief & Olk represented the widower of a physician employed by a large healthcare provider in New Jersey. Under the terms of the life insurance policy (paid by the employer), she was insured for a death benefit of $500,000; however, the life insurance company misinterpreted the terms of the policy and only paid $150,000. Without having to file suit, Trief & Olk obtained the full amount of coverage owed, with the client receiving the additional $350,000 to which he was entitled.
In the states of New York, New Jersey, and Massachusetts, insurance companies have two years from the date a life insurance policy is issued to contest its validity. This “contestability” period affords insurers the opportunity to investigate any potential misrepresentations on the insured’s policy application. If the application is found to contain errors or omissions which are “material,” the insurance company will declare the policy void and refuse payment.
What constitutes a “material misrepresentation” is a legal question which has been extensively litigated by Trief & Olk. In general terms, for a misrepresentation to be material, it must be of sufficient consequence to have influenced the insurer in determining whether to issue the policy in the first place. The insurance company will argue that given the withheld information, they would have either refused the policy outright or issued it under a higher premium.
Whether a misrepresentation is material is seldom a clear cut answer. At Trief & Olk, we have successfully handled misrepresentations initially deemed “material” by the insurance company, such as misstatements as to one’s net worth, omissions of prescription pain medications, and failures to disclosure medical conditions.
If you have been denied an insurance policy due to an alleged “material misrepresentation,” it is important for you to contact an attorney to determine whether the rejection has merit.
The law firm of Trief & Olk has a reputation for success in insurance denial claim cases requiring high-powered trial skills, expert research and sophisticated strategies.