Life is a tricky business full of twists and turns that course quietly through the days and months, and then suddenly, in a moment, bad faith insurance changes everything and an unexpected outcome leaves “what-if-only” thoughts looping through the human brain.
And so it was for a woman from somewhere in the southern US. She prefers the moniker “Average-Mom-of-Three” who is still struggling with a cruel result that no one saw coming.
We’ll call her “AMOT.”
AMOT and her family own a heating and air-conditioning company. It was started by her father-in-law many years ago. He’d become a wealthy and thoughtful man who went to great lengths to ensure that everyone in his family would be well taken care of when it came time for him to shake off his mortal coil.
His wife had died some years before and he had carefully and fairly parceled out property, life annuities, bank accounts, life insurance policies, vehicles and everything else he owned to members of his family. When he died, he wanted everything to pass smoothly with no arguments among the heirs.
Enter one of those life-twists that so frequently interfere with the best-laid plans.
AMOT and her husband were focused on a sick child - a child who was in fact dying. AMOT got behind in her paperwork and let some bills lapse. She also let the premiums on her father-in-law’s life insurance policy lapse with Protective Life. The policy had first been purchased some 7.5 years before.
She also let the premiums lapse on two other policies that were related to the business and commercial property. “We didn’t know you could re-instate an insurance policy; we had never been late with anything before,” says AMOT.
When she approached them about instating the policies, they explained the process and the policies were once again in effect. She then went to Protective Life to deal with her father-in-law’s life insurance policy.
“Can you even re-instate a life insurance policy I asked? Protective Life said all we had to do is fill in a re-instatement form. If it’s approved, you are ‘good to go.’” says AMOT.
No mention that there would be a two-year waiting period before any claim could be made related to the life insurance policy that was held on her father-in-law’s life.
To be clear, AMOT’s father-in-law had developed cancer during that 7.5 years that he had the policy. Protective Life knew that, but as long as the premiums were paid on time, there was no issue.
“If we had known that there would be a two-year waiting period, we would have paid the late premium and also made some changes to the way the property was dispersed in case he died during that two-year period,” says AMOT.
AMOT and her husband were the beneficiaries on the life insurance policy. The other assets were assigned to other beneficiaries.
“This was a key employee life insurance policy,” says AMOT. “When they were considering re-instating it, not only did they know there was a family that was going to need this money, this is a family and a business that is going to need these funds if something tragic happens. All they had to do was tell us that this was subject to deniability. That’s all they had to do.”
Then along comes another one of those things that you can’t imagine happening. AMOT’s father-in-law died - suddenly. He died four months after the life insurance policy had been re-instated.
AMOT and her family were stunned that Protective Life could deny their $500,000 claim. It left them struggling to hang on to the family business and fighting foreclosure on their home.
“Not all life insurance companies do what Protective Life did,” says AMOT. “I have talked to other companies and they don’t all do that.”
Attorney Spencer Farris who has waged considerable battles against insurance companies on behalf of consumers says AMOT needs to see a lawyer. “I can’t really say without knowing all the particulars of this case,” he told LAS. “But this is the kind of thing that a lawyer should look at. It always pays to see a lawyer.”
In an e-mail response to LAS, Protective Life said it “could not discuss specific matters when confidential health information is involved.”
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For her part, AMOT says that all the questions were answered truthfully, and that AMOT’s family gave Protective Life complete access to all medical information regarding her father-in-law’s health, in addition to the information the company already had.
It was the end of 2008 when all this unfolded. Years later, the “what-ifs” still ring in AMOT’s head.