Bloomberg has an interesting article on the antics that life insurance companies use to deny claims:
Jane Pierce spent nine years struggling alongside her husband, Todd, as he fought cancer in his sinus cavity. The treatments were working. Then, in July 2009, Todd died in a fiery car crash. He was 46. That was the beginning of a whole new battle for Jane Pierce, this time with Todd’s life insurance company, MetLife Inc.
A state medical examiner and a sheriff in Rosebud County, Montana, concluded that Pierce’s death was an accident, caused when he lost control of his silver GMC pickup after passing a car on a two-lane road.
Their findings meant Jane was eligible to collect $224,000 on the accidental death insurance policy that Todd had through his employer, power producer PPL Corp. MetLife, however, refused to pay. The nation’s largest life insurer told Pierce on Dec. 8, 2009, that her husband had killed himself. The policy didn’t cover suicide, the insurer said, Bloomberg Markets magazine reports in its April issue.
“How dare they suggest such a thing,” says Pierce, 44, a physician assistant in Colstrip, a Montana mining and power production city of 2,346 people.
She says she’s insulted that the man who courageously battled his disease for a decade was accused by an insurance company of abandoning his wife and two sons — one a U.S. Marine, the other a National Guardsman — and giving up on his fight to live.
Attempts to get the federal government more involve to prevent such behavior have apparently backfired. To be fair, denied claims are actually exceedingly rare. Even so.
Also worth noting is that later in the article, they cite a case where a claim was denied due to drunk driving laws. The problem is that the deceased was not actually in a car, but rather fell down stairs. According to the insurance company, that didn’t matter because alcohol contributed to the accident. It was reversed, but it’s another thing to file away when we consider the low BAC levels required for drunk driving in this country. It’s said that drowsy drivers, drivers on cell phones, and drivers listening to sports on the radio are “just as bad as drunk drivers.” By this reasoning, falling down the stairs because you’re sleepy is like being drunk is like being a drunk driver and is your own darn fault.
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It’s necessary to read quite far down into the article before coming across the statistics on denied claims. Horror stories notwithstanding, the fact remains that life insurance companies deny only a very very small percentage of claims.
That being said, it does tend to be harder or at least slower to collect on employer-paid life policies than on ones people buy themselves. Another point is that an employer-paid policy goes away when the employee leaves.
It’s necessary to read quite far down into the article before coming across the statistics on denied claims.
This seems to be a common journalistic tactic: Lead with the most egregious example you can find, vaguely imply a trend, and then only later in the article, if at all, reveal that it’s extremely rare. You have to dig much deeper into the article to find out why they tried to classify it as a suicide, and that a brief conversation with the widow’s lawyer was all it took to get them to pay out.
I kind of suspect that they’re trying to stir up antipathy towards private insurers generally in the hopes that it’ll translate into support for Obamacare.