Daily Archives: September 8, 2015

Group Life Insurer’s Literal Policy Interpretation Penalizing Insured for not working on Paid Holiday Rejected

Posted in: Breach of Contract, Case Updates, Life Insurance, Policy Interpretation September 08, 2015

Group life insurance policies often have confusing language about when they become effective. A trial court recently interpreted one to mean that the policy had not become effective to a full-time employee, though he was already eligible for the coverage, because he was not physically present at work when the policy was issued to his employer. Instead he was at home for a paid holiday and then in the hospital on sick-leave because of a sudden and fatal illness. The insurer and trial court penalized the employee for taking his paid holiday and sick-leave. They docked him the life insurance proceeds for which he had paid. The dispute centered around the policy’s “effective date of coverage” provision: whether being a …

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