Todd and Jane Pierce were a middle-aged couple from Colstrip, Montana who spent nine years struggling and supporting each other through Todd’s fight with cancer. Todd was diagnosed with skin cancer in his nasal cavity, but luckily, treatments were effective and Todd was able to become cancer-free within two years. In order to “rebuild his jaw and palate,” he had to withstand additional treatment, including more than 40 surgeries. But of course, this was a small price to pay in exchange for a new chance at life.
In July of 2009, Todd had attended a family reunion in Bismarck, ND. Others at the reunion would remember Todd as “the life of the party” and looked to be enjoying himself. He even made plans with a few family members to go hunting in the months to follow.
On his drive back home, Todd attempted to pass a vehicle on the highway only to lose control of his truck. According to the policy reports, the truck “rolled down an embankment and burst into flames.” The autopsy report would later show that he died due to smoke inhalation.
Benefits from an Accidental Death Insurance Policy
Fortunately, Todd had a $224,000 accidental death insurance policy from MetLife through his employer. He also had a MetLife term life insurance policy he provided through his employer as well. His wife, Jane, applied for benefits under both policies. MetLife agreed to pay benefits on his life insurance policy and sent Jane a “checkbook” for the $224,000 from his term life insurance policy. However, MetLife denied payment of benefits on Todd’s accidental death policy, claiming that his death was not an “accident.”
Both police reports and reports from the state medical examiner stated Todd’s car crash and subsequent death was an accident. MetLife came to the conclusion that Mr. Pierce had committed suicide, which was not covered under his accidental death policy.
MetLife Had Their Own Interpretation
Despite the claims from state officials, MetLife found medical records that showed Todd had high levels of Tramadol (a pain reliever prescribed to Todd by his doctor to use as needed) in his blood stream at the time of his death. MetLife assumed these high levels of the drug were due to Mr. Pierce’s attempt to overdose and commit suicide. However, Thomas Bennett, the associate medical examiner of Montana explained that “this Tramadol elevation is an artifact of the severe damage Mr. Pierce’s body received following the crash and is not a result of taking sky-high levels of the drug.” Therefore, the drug did not cause his death but was a reaction to the pain caused by the accident.
With all the facts pointing towards an accident, on December 8, 2009, MetLife continued to conclude that Todd had committed suicide and they were therefore not obligated to pay benefits under the accidental death policy. Disregarding the expert, unbiased opinion of the Montana associate medical examiner, MetLife stated that “the elevated levels of Tramadol gave them just cause to suspect (in the absence of proof) that Todd took his own life, therefore allowing them to keep $224,000 in their bank account.”
MetLife finally Agrees to Pay the Claim
Jane hired an attorney to help her fight MetLife and recover the benefits due to her under the policy. After speaking with Jane’s attorney, MetLife quickly realized they did not have a legitimate case. Finally, a year after Mrs. Pierce had initially applied for benefits, MetLife agreed to settle the case and pay the $224,000 due under the policy, but continued to deny wrongdoing.
Thanks to ERISA, Plaintiffs Continues to Get the Short End of the Stick
In the meantime, MetLife had earned interest on the $224,000 during the year they withheld payment. This is one of the perks insurance companies frequently receive under the protection of ERISA. Under ERISA, a claimant is only entitled to the benefits at issue – i.e., the accidental death benefit of $224,000 in the Pierce case. So by delaying payment of benefits, insurance companies routinely “make money” on interest from investments on these large sums of money, even when they end up having to pay the claim.
MetLife’s Bad Faith Practices
Although insurance companies continue to state that they pay all their claims according to the terms of their policies, MetLife is no stranger to the “bad faith” allegations alleged by many of their disability and life insurance policyholders.
The end game is the same for all insurance companies; the more money they receive in premiums and the lower sums they pay out in claims, the greater their profits. And many insurance carriers have crafted their claims departments to function with this bottom line in mind. Some companies have even been shown to have “incentive programs” in place for their claims handlers to promote lower claims approval numbers.
For more information on bad faith insurance practices, visit our Bad Faith Insurance page. If you believe your disability, life, or accidental death insurance was denied in bad faith by an insurance company, contact Grabhorn Law to discuss your case.
Source: Accidental Death Becomes Suicide When Insurers Dodge Payouts – Bloomberg Markets Magazine – http://www.bloomberg.com/news/2011-03-01/accidental-death-becomes-suicide-when-insurers-dodge-paying-life-benefits.htm; MetLife: Can you Sink any Lower to Avoid Paying a Claim? – Lawyers and Settlements – http://www.lawyersandsettlements.com/blog/metlife-can-you-sink-any-lower-to-avoid-paying-a-claim-07161.html