Life Insurance Disability Waiver of Premium discontinued....leaving no coverage

Asked almost 6 years ago - Houston, TX

My mother has been disabled since age 54. Every year her life insurance premium has been waived as long as she received and returned a form to the insurance company that she is unable to work. This past year she has moved from her home, to a retirement center, to a nursing home and I was unable to find the paperwork. I contacted the life insurance company and received the paperwork and returned it, but was told that the company had made an error and she would no longer be covered as she has reached retirement age. That, in fact, her coverage should have been discontinued at age 65 (9 years ago as she is now 74.) We would now need to convert her coverage to private pay.
My mother has always told me not to worry about her funeral expenses because she has $32,000 life insurance. She had been led to believe that as long as she continued to be unable to work she would ALWAYS have her premium waived. This was substantiated by the fact that they continued to do so for the 9 years after she turned 65.
I was completely dumbfounded when they told me the premium would no longer be waived and I asked for the original insurance contract from her employer. I received a photocopy of a pamphlet that has no date on it. I then started trying to locate any old papers from her things. I found an insurance document that does not have any mention of the premium waiver ending at 65.
I know that if Mom had thought the insurance would at some time expire, she would have made other arrangements for insurance. Her understanding from her many conversations and questions to the insurance company left her absolutely sure that she was covered without exception and now, neither of us are able to pay for the "conversion”. Mom has just applied for Medicaid to pay her nursing home.
The company suggested in the response to convert her premium has no continuance of previous coverage. We are now in the situation of looking for life insurance for a 74 year old ailing nursing home resident with no previous coverage.
To keep her current coverage, we would have to pay over $900 quarterly.
For $20,000 - over $600 quarterly
$10,000 - over $300 quarterly.
What recourse do we have in that the insurance company misrepresented her coverage which dissuaded Mom from seeking other coverage and we are now unable to afford the current exorbitant premiums?
How can I be sure that the paperwork they sent is not a newer policy with different coverage..? The paperwork I found has different verbiage and precedes the copy sent to me.

Attorney answers (1)

  1. J. Brantley Durrett III

    Contributor Level 9

    1

    Lawyer agrees

    1

    Answered . Your question is rather complex. If the policy was issued as an employee benefit, then it falls under a federal law known as ERISA - the Employee Retirement Income Security Act - and preempts state law. From your question, it sounds like the life insurance policy was issued as an employee benefit. Under ERISA, if misrepresentations were made to your mother that reasonably caused her to forego obtaining life insurance coverage, the measure of damages would be the difference between the price for coverage at the time of the misrepresentation and the current price for an identical life insurance policy, plus attorneys fees and costs.

    In a litigation context, to confirm that the policy received is identical to the policy in force at the time, you would simply have the insurer or employer swear that it is. Outside of a litigation context, there is really nothing you can do to confirm that it is the same other than ask that the insurer represent that it is to you in writing. Another option might be to try to discover some old policies from that time period from other employees,

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