10 Life Insurance Beneficiary Horror Stories

Ross Quade | Life Insurance | 20 Mar, 2015 | No Comments

Uh Oh

When individuals take out a life insurance policy of any sort they think that the insurance companies would look after their family’s interests when the time comes. However, the picture is not often as rosy as it may seem as there are plenty of horror stories that can put a mortal fear of insurance companies in the hearts of many.

1. Heath Ledger’s Estate’s Fight with Insurance Firm for His Life Insurance

Heath Ledger’s death due to an overdose of prescription painkillers was one of the most tragic deaths in Hollywood in recent memory; however, the insurance company who was supposed to pay $10 million to a trust in the name of her his daughter Matilda refused to pay stating that the death was a case of suicide. Additionally, the fact that Ledger died in less than a year of purchasing the policy made the whole thing ‘suspicious’ for them. Ledger’s estate produced all the autopsy reports to prove beyond doubt that it was not a case of suicide and only then did the insurance company pay a percentage of the claim. Even the biggest and brightest of Hollywood are not exempt from the horrors perpetrated by the insurance companies.

2. Widow Denied Husband’s Life Insurance after the Latter Paid Premiums for 18 Years

Cigna is featured for the second time in this list and this time they tried to get away by not paying the widow of a policyholder the money she was entitled to after the death of her husband. The man had religiously paid his monthly premiums for 18 years from the time he worked at Newark Housing Authority and then when he changed jobs he was allowed to continue that policy by Cigna. However, when the time came to pay the claim, Cigna refused stating that according to the terms of the deal with Newark Housing Authority, an employee had to work for 25 years to be eligible. This though was completely untrue since Cigna had agreed to take the premiums after the man quit his job at NHA and had assured him that the policy was still in place. After a prolonged media campaign, Cigna relented and paid the amount in full with interest and the widow’s horror finally came to an end.

3. Husband’s Suicide Robs a Woman of Her Mortgage Life Insurance

When Christine McCarthy and her abusive husband took out a mortgage life insurance policy she did not know the sort of troubles she would run into a mere 2 weeks after finalizing the policy. The husband committed suicide in a fit of rage and the insurance policy was cancelled, leaving her with a very large unpaid mortgage. This was a situation that was nothing short of a horror for Mrs. McCarthy as she tried to convince the insurance company that her husband did not commit suicide to rip off the insurance company. The company refused to entertain such notions.

4. British Man and His Family Left Penniless After a Minor ‘Mistake’

Imagine the horror of anyone lying on his deathbed knowing that the £100,000 life insurance policy meant for his family would not be paid when he dies and that it was due to a ‘mistake’ that was simply minor. Nic Hughes died of gall bladder cancer in the year 2012 and took out the life insurance in 2009. He did disclose that he was suffering from ulcerative colitis at the time and the insurance firm cleared his file; however, at the time of honoring the claim they backtracked stating that they will not pay since Mr. Hughes had failed to point out certain symptoms that he suffered from.

5. Divorced Man’s Daughter Robbed of Her Father’s Life Insurance

When a man is divorced it usually means that any life insurance he has in place would automatically pass on to his surviving child or children. With this particular insurance company, this was not the case. The insurance company required the man who owned the policy to submit a special form that would change the beneficiary from his ex-wife to his daughter, which the father was unaware of before his death. In keeping with this strange policy, the entire $400,000 life insurance claim automatically got paid to the ex-wife by the insurance company causing the daughter of the policyholder to lose out to what was rightfully hers.

6. Husband Loses Wife’s Life Insurance Claim to Sister-in-Law

A woman in New York had purchased a life insurance policy when she was single; when she got married she did not insert her husband’s name as the beneficiary. She was under the impression that she did not need to do this. However, after the schoolteacher’s death, the insurance company turned over the entire $1 million worth of life insurance to her next of kin, which happened to be her sister. The horror for her husband who thought he would be awarded the life insurance money must have been considerable but the rules in place at the insurance company dashed his hopes.

7. MetLife Calls an Accident Suicide and Denies Payout

When Jane Pierce’s cancer stricken husband died in a car accident in 2009, she was pretty sure that the life insurance provider, MetLife, would pay the claims amounting to $224,000 without any delay, but she was in for a rude shock as the company judged the accident as suicide. Even the autopsy report clearly stated that it was an accident. MetLife doggedly defended their stance and after the harrowing experience Mrs. Pierce sued MetLife and only then did they rescind their decision and pay the full amount.

8. Online Switch Results in Horror for Beneficiary

When a school teacher in Minnesota first filled out her paper work for her employee subsidized life insurance, she nominated her sister as the beneficiary, but when the whole thing migrated online she was apparently supposed to restate the name of the beneficiary. She did not since she was under the impression that if stated otherwise, the previous arrangement was in place but that was not how the insurance company saw things. When she died her sister was denied the claim and it was only after many headaches that the insurance company could be convinced that paying her the claim was the logical thing to do.

9. Father Denied Son’s Life Insurance-by-Insurance Providers

The Employee Retirement Income Security Act or ERISA has been a lifeline for plenty of professionals but one man found himself in a horrible situation when the insurance providers of his son’s employee life insurance denied the claims for a curious reason after his son died. The reason cited seemed like a legal loophole identified by the firm and they stated that the person had not provided ‘evidence of  insurability prior to getting approval for coverage’. A judge summarily threw out the case after the insurance company was sued but the horror for the father was quite something.

10. Insurance Denied Even Though Omitted Information was not the Reason of Death

If a person hides the fact that he is a smoker and then dies of cancer, the insurance company is well within its rights to refuse to pay life insurance claims to the family. However, that is something that does not apply if the person dies of an accident that is completely unrelated to that missing piece of information. That is what happened with a man in Missouri who did not mention that he was a smoker and when he died in an accident, his family was denied any life insurance money. This particular incident has to be one of the most horrible cases of high handedness from insurance companies.

 

 




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