Failure to Exhaust Administrative Remedies Can Bar Your Life Insurance Claim

Family of employees in Chicago are often beneficiaries under the family member’s group life insurance plan through an employer. When your family member passes away, contesting a denied life insurance claim is usually just one of many responsibilities, not to mention time spent grieving. But that is even more reason to get skilled ERISA life insurance counsel involved right away, as demonstrated by a recent case.

In Sickman v. Standard Insurance Co., No. 22-3009, 2023 WL 1993675 (E.D. Pa. Feb. 14, 2023), Ms. Sickman’s husband was covered by a group life insurance policy through his employer, Flowers Food. It was insured by Standard Insurance Company. After Mr. Sickman passed away in 2017, Ms. Sickman claimed life insurance benefits. Standard denied the claim, instructing Ms. Sickman of her right to appeal the denial. Ms. Sickman did not appeal the denial within the allotted time. She hired a lawyer five years later, who sued the employer and Standard Insurance Company. She raised claims for negligence, breach of contract, promissory estoppel, and breach of fiduciary duty under ERISA § 502(a).

Standard and the employer moved to dismiss the complaint because the state law claims were preempted under ERISA, and Ms. Sickman failed to exhaust her administrative remedies by not appealing the life insurance claim denial within the allowed time. Ms. Sickman argued appealing would have been futile, but the court disagreed, citing her five-year wait to file a complaint. The court granted Standard’s and the employer’s motion to dismiss, leaving Ms. Sickman with no recourse, all because she did not take timely action to appeal the claim denial.

If your claim for life insurance benefits has been denied, do not wait. Call a skilled ERISA life insurance lawyer immediately. You only have 60 days to appeal such a denial, and you cannot afford to fall into the same trap Ms. Sickman fell into.