If You Become Terminally Ill, Communicate with Your Life Insurer About Keeping Coverage in Force

Employees in Chicago with group life insurance and accidental death coverage through their employers rarely think about that life insurance as much as those who buy individual policies do. But when you or a loved one becomes ill, it is best to start talking to the life insurer right away. There may be options for accelerated death benefits. More importantly, you want to make sure the insurer does not manufacture a reason to deny your family’s claim later. Sometimes, the discovery of the illness is so sudden, insurance is the last thing people think about. But it should be higher on the list.

Most group life insurance policies include terms for keeping coverage in the event you become totally disabled, which often happens in advanced terminal illness cases. They are called Waiver of Premium clauses in most policies. But you have to apply for it. If you do not apply for it right away, you run the risk the insurer will argue you lost your coverage, even though it should not have happened. In a case I once handled, Garner v. Reliance Standard Life Insurance Co., the insurer gave misleading information to a woman with stage 4 pancreatic cancer about how to keep her coverage, and then later denied the children’s claim due to losing coverage. Thankfully, we were able to resolve that mater.

More recently, in Ministeri v. Reliance Standard Life Insurance Co., No. 18-10611, 2021 WL 495151 (D. Mass. Feb. 10, 2021), Mr. Ministeri’s job required business travel, and while on a trip, he became disoriented. An MRI revealed a brain lesion, and a biopsy revealed he had a glioblastoma, an aggressive brain tumor. He underwent treatment and did some work from home, but he was not able to travel for business. He applied for long term disability benefits, but passed away soon after. When his wife claimed the life insurance, Reliance Standard contended Ministeri lost his coverage because he did not work the required 20 hours every week. The policy defined covered employees as those whose regularly scheduled work week is at least 20 hours. Reliance Standard took the position that meant the person must actually work a minimum of 20 hours every week. When Minsteri’s wife sued under ERISA § 502(a), the court held the policy language did not require actually working the minimum hours every week, so long as it was the “regular schedule” to do so.

If you have recently been diagnosed with a terminal illness, and want to know how you can make sure to keep your coverage, talk to a skilled life insurance lawyer. You may even be able to qualify for accelerated death benefits.