In this several-part blog series titled The Basics of an ERISA Life, Health and Disability Insurance Claim, we discuss the basics of an ERISA life, health, accidental death & dismemberment and disability claim, from navigating a claim to handling a claim denial, through the subsequent appeal and litigation. In Part Seventeen of this series, we discuss when ERISA applies. ERISA governs a wide variety of employee benefits. It is safe to say that most employee benefits are controlled by ERISA. As such, if the employee benefit plan is provided through a private employer, it is likely, but not necessarily certainly, governed by ERISA. However, at times, instead of ERISA, state law or a governmental organization’s own unique laws and procedures apply. If a claimant wins their case, ERISA provides for an award of the denied benefits, attorneys’ fees, interest and costs. State law varies from state to state but may provide for the award of the denied benefits, consequential damages, punitive damages, attorneys’ fees, litigation costs and interest, among other potential remedies. In other words, if state law applies to an employee benefit claim, greater remedies are available to the claimant. The trial procedures for these two types of claims are very different. ERISA claims are decided by a judge, typically based on the administrative record consisting mainly of documents submitted to the claims administrator during the administrative appeals process. Discovery is much more limited. However, for state law claims, the usual litigation procedures are available. These include a full panoply of discovery, use of experts and a jury trial. The procedures for disputing claims for benefits from different governmental agencies vary greatly with each organization often being quite different. Some claims benefit from being governed by ERISA. Other claims benefit from being governed by state law. Given these drastic differences, it is critical to determine which body of law and procedures apply to a claim.

The first broad exception to ERISA’s applicability is that it does not apply to benefits provided by government employers. See 29 U.S.C. § 1003(b)(1). This exception applies to benefits provided by municipal, state and federal governments and thus affects the benefits earned by a wide variety of people. People who work for these different governmental entities may have very different benefits and rights thereto if a claim for benefits is denied. If a claim is denied, some governmental entities may have a simple appeal process resembling ERISA. Others may provide for an entire trial and discovery process. However, this exception may not apply to all government employees. It depends on how one obtains the benefits. For example, if the benefits in question were actually obtained through a union, ERISA may control because the benefits were not provided by the government entity, but rather, they were provided by an employee organization: the union. One has to look at the plan documents and who provides the benefits to determine which area of law applies.

A second major exception to ERISA’s applicability is that it does not govern church plans unless the religious entity specifically elects to be governed by ERISA. See 29 U.S.C. § 1003(b)(2). Religious organizations have the right to either be governed by state law or opt into being governed by ERISA. Religious organizations, such as churches and their affiliated hospitals or schools, provide a wide variety of benefits to their employees. Given that religious organizations have the right to opt into ERISA, it is often difficult to determine whether ERISA applies. Once again, checking the relevant plan documents is often the only way to be certain.

A third common exception to ERISA is for plans that are “maintained solely for the purpose of complying with applicable workmen’s compensation laws or unemployment compensation or disability insurance laws[.]” 29 U.S.C. § (b)(3). This exception is relatively simple. If the plan merely exists to comply with a state’s worker’s compensation laws, then ERISA does not apply.

There are other exceptions to ERISA, but these are the most common ones. In light of the differences between ERISA and state law, many people mistakenly assume that one is better than the other. Even many attorneys make this mistake. Most attorneys make this error because they are more comfortable with one form of litigation than the other. Assuming that one form of litigation is superior is simply incorrect. It depends on the specific details of the claim. For example, for relatively small claims, ERISA is often much more favorable to the claimant. Under ERISA, if a claimant establishes that they are entitled to the benefits in question, it is fairly easy to win an award of reasonable attorneys’ fees. However, under the law of most states, whereas attorneys’ fees and a variety of other damages are available upon successfully establishing bad faith, establishing bad faith may be difficult. Furthermore, it is often difficult to obtain large amounts of damages beyond the contract benefits if the initial amount in dispute is small. As a general rule, a claimant seeking a smaller benefit will fare better if their claim is governed by ERISA, with its limited discovery and simplified procedures.

If, however, there is a significant amount of money in dispute, having the matter be governed by state law may be useful. This is especially true if the party denying the claim behaved in a particularly egregious manner, which may allow an insured to collect punitive damages. This makes the matter prime for a very large award if the case is won at trial. These factors will also influence any settlement negotiations and result in a potentially larger settlement.

Given the differences between the various forms of litigation related to employee benefits, it is important to confer with an expert in this area of the law. Consulting with knowledgeable attorneys, such as those at the McKennon Law Group PC, is critical if you want to receive all of the benefits that you are entitled to under the applicable law.

Life insurance exists to help those who’ve lost a loved one. Family members of the deceased are protected by their life insurance plans after they pass away, as they provide financial relief and compensation when the surviving loved ones need it most. But even life insurance policies that are thoroughly drafted, with contracts signed, can take awhile to pay out.

Insurance companies seem to always find a way to delay paying out claims, or deny claims altogether. The reasons below are some of the most commonly occurring reasons we see at McKennon Law Group. If you or a loved one are being denied a life insurance policy claim, or your claim is being delayed, contact our attorneys for a free case evaluation.

Reason 1: Drugs or alcohol were involved in the death

Unfortunately, many life insurance companies will disqualify deaths that occurred under certain circumstances. Death due to drug or alcohol abuse are often included as some of these circumstances. This manner of death is referred to as “self-inflicted,” and typically refers to any death that occurs when the deceased happened to be under the influence of these substances– even if their cause of death wasn’t directly due to the consumption.

If your life insurance policy claim is being delayed or denied due to a drug- or alcohol-related death, contact McKennon Law Group for help.

Reason 2: The deceased died via homicide

There are some exceptions, but many life insurance policies don’t cover homicide. These cases are especially complex. If a beneficiary is suspected of homicide, and it’s believed that they intentionally killed the deceased, they won’t have a chance at receiving the benefits until the investigation ends. Similarly, if a beneficiary engaged in any other criminal or unlawful activity, especially one that’s believed to have contributed to the death of the deceased, the claim will be held up until the investigation is resolved or the beneficiary is no longer under investigation.

Reason 3: Death by suicide

Life insurers have the right to delay or deny a claim if the death occurred by suicide. There are clauses in most insurance policy contracts that aim to discourage those contemplating death from buying a life insurance policy. Sometimes, insurance companies will flag this as a type of life insurance policy fraud. It’s important to note, however, that not all life insurance policies exclude suicide as a rule, so be sure to check the fine details.

In situations like these, it’s wise to seek the help of an attorney who can contact the deceased’s insurance company, find out valuable and detailed information from the contact, and fight for your right to life insurance policy money.

Reason 4: The deceased passed away during the contestability period

If an individual passes away within the first two years of their insurance policy being active, the insurer can contest the policy if they so choose. When someone applies for life insurance, the application will require certain information. This information might include their income, health, criminal history, age, body mass index, and more. Insurer’s have the right to contest the applicant’s information in order to make sure it’s accurate.

During this window, which is referred to as “the contestability period,” the insurance company may discover that the information was not entirely accurate, or there might be important information that was excluded from the original life insurance policy application. The insurer has the right to deny coverage if this occurs. For example, if an individual fails to disclose that they’ve been arrested before, or doesn’t disclose that they smoke cigarettes, the insurer can back out of coverage.

Similarly, an insurance company can deny paying out a life insurance claim if it’s been discovered that information in the application or life insurance policy was inaccurate, misrepresented or untruthful. Even if the death in question did not occur as a direct result of the misrepresentation, for example, if someone failed to say they smoke cigarettes, but died due to a car accident.

Reason 5: The insured failed to pay their insurance policy premium

This is one of the most commonly occurring reasons that an insurance company might delay in giving a claim or deny it altogether. Life insurance policies are only active for as long as the insured completes payments on time. When the insured fails to pay their premium, the insurance can lapse or be canceled altogether.

This type of denial and delay are quite common. If you or a loved one has an insurance policy, always be certain that payments are being made on time and the full amount of the premium requested is paid by any associated deadline. It’s important to note as well that beneficiaries have the right to know whether or not insurance companies sent late payment notices to the policyholder, and whether or not the situation was rectified.

When it comes time to receive life insurance benefits, beneficiaries, who are often friends and family members, sometimes create disputes, as each person has conflicting ideas of how much money they should receive from the policy. Percentages of money owed are listed out in the policy for each beneficiary, but when life changes occur, relationships change and it can be difficult to know where life insurance policy money rightfully belongs. Due to the personal, familial nature of these issues, life insurance policy disputes can be sensitive, and run the risk of straining relationships between close loved ones.

If you or a loved one are tangled in a life insurance policy dispute, contact McKennon Law Group to schedule a free consultation with one of our skilled dispute attorneys. By teaming up with an experienced, hard working attorney, you mitigate the risk of missing out on money that’s rightfully owed to you, as well as gain a trusted partner to guide you through this tough challenge with your loved ones.

What Are Common Reasons For Life Insurance Beneficiary Disputes?

It’s never easy to deal with beneficiary disputes, especially when they occur due to a major life change. These major events, such as divorce, death, marriage, childbirth, or even adoption can make disputes arise between life insurance policy beneficiaries. For example, someone may have a child and forget to reflect this change in the policy, which would in turn make that child miss out on money that some feel they should receive.

Sometimes, a policyholder who is sick will make last-minute changes at the end of their life. In other cases, family members or loved ones simply feel left out, and will want to claim some of the insurance policy money as well.

Those who feel they deserve money from the policy have the option to file a competing claim, stating that the life insurance policy holder was influenced by others, was not of sound mind, or maybe was even coerced to choose certain beneficiaries when they were making their designation plans.

What Happens During A Life Insurance Policy Dispute?

Once an insurer receives the dispute, they may file what’s referred to as an “interpleader action,” where the life insurance money is placed into escrow and only re-released once the dispute has been settled. Beneficiaries involved in the dispute might require mediation or arbitration to be resolved, or may need to bring their case before a jury.

Whether you are seeking life insurance money as a beneficiary, or could potentially lose out on your cut of the policy money, teaming up with a lawyer is a wise decision, as they will help you share your side of the story and defend you before others.

Do I Need A Lawyer For A Beneficiary Dispute?

It is always wise to defend yourself with the help of a lawyer. With the help of a qualified life insurance dispute attorney, you can fight for the money you rightfully deserve and protect yourself from others with malintent.

WIthout the help of a lawyer, it can be difficult to state your claim before a judge, jury, mediator and of course, other beneficiaries. With the help of a lawyer, it’s easier to gain access to important documentation, evidence, and other resources that prove you are a worthy beneficiary and are entitled to money.

Our attorneys at McKennon Law Group use their vast network of legal resources to create a strong case for your defense, and have decades of skill and expertise to help you win your case. Without a life insurance dispute attorney, it can be harder to create a strong case.

How Does A Lawyer Help Me Win My Life Insurance Dispute?

Our attorneys can help you navigate tough situations, such as when beneficiaries are improperly changed, or changed at the last-minute, as well. Even if no beneficiaries are listed on a life insurance policy, or attorneys can step in and help make sense of this confusing situation, eating your stance and your side is sufficiently communicated before a judge.

Other disputes our team can handle include:

Denied claims (due to fraudulent beneficiary designation, or otherwise).
Disputes between children as beneficiaries.
Disputes between current spouse and former spouse.
Disagreements on percentages of payout to each beneficiary.

We’re aware that life insurance policy beneficiary disputes can be especially challenging, as they often involve close family members, loved ones and even friends. Our attorneys are compassionate to this information, and pledge to make every step of the proceedings as effortless and stress-free as possible on your behalf, so your situation can be resolved as efficiently as possible.

Call McKennon Law Group PC today to schedule a free phone evaluation regarding your life insurance policy dispute. Together, we can help win your dispute and claim the money that’s rightfully owed to you.

What Is Life Insurance?

If people in your life rely on you financially, they could quickly be put into financial distress if you were to die unexpectedly. Life insurance is a contract between the insurance company and an insured in which the company promises that at the death of the insured, the company will pay a certain amount of money to a person the insured designates in the contract if that person survives the insured. In return for the promise to pay, the insured will pay the life insurance company a premium.

Many people are unsure whether or not they need life insurance, let alone if they need a lawyer to help them get a policy or get a claim from their policy. If you have any questions about the information below, contact McKennon Law Group to speak to a qualified insurance attorney about your options.

How Do I Know If I Need Life Insurance?

Not everyone needs life insurance. Parents don’t typically take out life insurance policies on their children, as parents are responsible for their children’s financial wellbeing. Rather, parents would take out a life insurance policy on themselves to mitigate the risk of bringing financial hardship upon their children.

If your death would financially impact the other people in your life, it’s wise to get life insurance. If you have a life insurance policy and pass away, the people who receive your death benefit – your spouse, children, or other family members – are permitted to use that money to cover their financial needs, such as paying a mortgage or car payment.

If you die unexpectedly and you feel that your sudden death would put your loved ones in a bad financial position, getting life insurance would be wise. Having life insurance takes care of any debt you hold during your lifetime after you pass away, meaning it won’t become a burden to your loved ones. Your spouse or children may inherit certain debts after you pass away, making it a wise decision to get insurance to avoid this. Many people also get life insurance if they believe their funeral costs would be a financial burden on their loved ones.

How Should I Choose A Life Insurance Lawyer?

As with any time you need the help of a lawyer, you should make your choice based upon their record of success, any awards they’ve won, referrals they’ve gotten, and so forth. You want to work with a law firm that can prove their success and has repeatedly demonstrated their care and concern for their clients.

With over 70 years of experience, the McKennon Law Group has specialized in long-term disability and short-term disability insurance, life insurance, health insurance, accidental death insurance, and long-term care claims, as well as all types of ERISA litigation claims involving employee benefits, including group insurance claims, pension claims and severance claims.

Our law firm provides aggressive advocacy to those who need it most. We’ve recovered millions of dollars for our clients, and are proud to receive superb testimonials from our many thankful clients. Our attorneys have received many recognitions and awards as top insurance and ERISA attorneys, including Super Lawyers, The American Lawyer, Martindale-Hubbell, AVVO, Forbes, and the Los Angeles Times, among others. See our Awards & Recognitions. These awards and accolades are testament to our commitment to our clients, and proof that we will stop at nothing to ensure our clients receive the best possible outcome for every case, every time.

How Much Does It Cost To Speak With A Life Insurance Lawyer?

At McKennon Law Group, most of our cases are taken on a contingency fee basis. A contingency fee basis means that you pay nothing at all unless we win your case by way of judgment, reinstatement of benefits or settlement. If we don’t win your case, you pay nothing.

Not all California insurance lawyers offer a free consultation either, but our law firm does. We offer a free, no-risk case evaluation to anyone with issues regarding life insurance – or any other insurance policy they hold. We understand that when insurance companies fail to properly pay out claims, or delay in paying out claims, it can put you in a tight financial spot. That’s why our initial phone consultation is offered free of charge to any California resident in need.

Schedule A Case Evaluation With A Life Insurance Lawyer Today

If your life insurance company has acted in bad faith, or you have questions regarding the legal terms and conditions laid out in your life insurance policy, schedule a free case evaluation with the California insurance attorneys at McKennon Law Group today.

What Is Bad Faith?

Under Federal law, all people owe a basic duty of care to others. This duty of care extends to businesses and business owners as well. Insurance companies are not exempt from this basic duty of care. Insurance companies are required by law to operate in good faith with every policyholder. This means, a policyholder should not have to worry that their insurance company is taking advantage of them when they’re not looking. This is considered bad faith.

“Bad faith” is a term that generally describes dishonest dealing in any capacity. Depending on the exact setting, bad faith may mean a dishonest belief or purpose, untrustworthy performance of duties, neglect of fair dealing standards, or a fraudulent intent. All insurance contracts and documents should imply a duty of good faith and fair dealing between both the insurance company and the policyholder. When this is breached, policyholders have the right to take action.

What Are Examples Of Bad Faith Insurance Dealing?

Insurance companies have a bad reputation for being focused solely on their profits, and not giving policyholders the money they deserve when they need it most. Because insurance companies must meet their bottom line, bad faith claims are somewhat common. Many insurance companies will deny a claim immediately, in hopes that a policyholder will give up and accept defeat. In other cases, an insurance company will treat a policyholder unfairly, take far too long paying out a claim, or worse – wrongfully deny a claim altogether.

Consult with an attorney if your insurer:

Improperly investigated an insurance claim
Made a lowball offer
Was dishonest or fraudulent
Changed your policy without telling you
Denied your claim without any explanation
Ignored your attempts to communicate
Refused to accept you supporting documentation
Charged an unfairly high premium
Wrongfully cancelled your policy
DIdn’t advise you of a lapse in your coverage

Is A Denied Claim Always Bad Faith?

When an insurance company denies a claim, this doesn’t always constitute bad faith. There are a handful of reasons why an insurance claim could be rightfully denied. However, if your claim has been denied and you feel that it should have been accepted instead, you have every right to contact a bad faith insurance lawyer with any questions you may have.

Insurance claims can be denied for legitimate reasons, such as when a policyholder seeks compensation for damages that are not included under their policy. Insurance claims can also be denied if the claim does not contain sufficient information to back up the claim, proving why the policyholder requires compensation. This situation can be fixed with the help of a lawyer.

Sometimes, insurance companies do make mistakes. Sometimes insurance adjusters calculate a different amount of damages than the policyholder calculates, leading to a discrepancy. This is not necessarily bad faith, but doesn constitute a mistake that needs to be addressed. If you are unsure if your denied claim is bad faith or not, speak to a lawyer as soon as you possibly can.

How Can I Fight A Bad Faith Insurer?

Sadly, it’s not rare for an insurance company to act in bad faith- but fighting back is possible. If you have any inclination that your insurance company has been acting in bad faith, contact the McKennon Law Group as possible.

If applicable to your situation, our lawyers will help you hold the insurance company accountable by filing a lawsuit against them for acting in bad faith. Before filing a lawsuit, your lawyer will likely advise you to work with your insurance company as best as you can. One of the best ways to fight back against a bad faith insurer is to keep all documents, records and emails that demonstrate evidence of your loss. If you can provide this to the insurance company, they are required to adjust their actions accordingly. If they refuse, contact a lawyer.

Schedule A Free Consultation With McKennon Law Group Today

Your initial consultation with our law firm is free of charge. Additionally, most of our cases are taken on a contingency fee basis, which means that you pay nothing unless we successfully resolve your case by way of judgment, reinstatement of benefits or settlement.

If you need to fight back against a bad faith insurance company, schedule your free consultation with McKennon Law Group as soon as possible.

Every insurance carrier is expected to operate on a good faith basis. This means, every policyholder has the right to take out an insurance policy and believe that they won’t be scammed, misled, or otherwise taken advantage of. If an insurance company acts without regard for their policyholders, this is what’s referred to as “operating in bad faith.” Bad faith is a term that generally describes dishonest dealing. Depending on the exact setting, bad faith may mean a dishonest belief or purpose, untrustworthy performance of duties, neglect of fair dealing standards, or a fraudulent intent.

When an insurance company takes advantage of you and operates in bad faith, you have every right to hold them accountable in the eyes of the law. A bad faith insurance lawyer can help you recognize the insurance company’s wrongdoings, will create a strong case that demonstrates their negligence, and will fight every step of the way for you to get the compensation you deserve. For some, the only issue is finding the right lawyer.

If you’ve never worked with a lawyer before, and are unsure what to look for in a bad faith insurance lawyer, use the information below as a guide. Generally speaking, you want to work with a lawyer who is honest, has a demonstrated track record of success, sticks to insurance law, and is authorized to practice law in your home state.

Work With A California Insurance Lawyer Who Is Successful, Qualified, And Hardworking

It can be helpful to ask friends, family members and neighbors who they trust as a lawyer also. At McKennon Law Group, we’re proud to have hundreds of satisfied clients and are thankful when our former clients provide us with a referral. Thanks to our record of successful cases, we’re often mentioned when Californians ask who to turn to for insurance help.

In addition to our impressive track record of success Our attorneys have received many recognitions and awards as top insurance and ERISA attorneys, including Super Lawyers, The American Lawyer, Martindale-Hubbell, AVVO, Forbes, and the Los Angeles Times, among others. See our Awards & Recognitions. Not all California insurance lawyers have widespread recognition of their success, but our law firm does. We’re proud of these accolades, as they prove our commitment to our clients and the success of their cases.

What Are Some Examples Of Bad Faith Insurance?

Are you still unsure if you need a lawyer? The actions below constitute bad faith insurance dealing. If you feel that your insurance company has done any of the actions below, call a lawyer and set up a free consultation.

Increasing your premium. Changing your insurance policy, without letting you know, is fraud.
Giving out lowball offers. If your insurance company knowingly offers less money than you deserve, this is operating in bad faith.
Unreasonable and unfair demands. If your insurance company asks for documents you can’t access or that are irrelevant to your claim, this behavior is not permitted.
Improperly conducted investigations. Investigators for your insurance company are also required to operate on good faith, and always must conduct an honest and reasonable investigation.
Delay in making a decision. Insurance companies are required to make decisions regarding your claim in a reasonably efficient manner. Purposely taking too long to process a claim is considered bad faith.
Wrongfully denying a claim. If an insurance claim is denied for no reason, or for an illegitimate reason, your insurance company needs to be held accountable for this.

There are a multitude of ways in which an insurance company can act in bad faith. If you’re concerned with the way your insurance company has handled your policy or a recently filed claim, contact McKennon Law Group as soon as possible.

Schedule A Free, No-Risk Case Evaluation WIth McKennon Law Group Today

When insurance companies act in bad faith, innocent people pay the price. If you feel that your insurance company has taken too long to process your claim, wrongfully denied your claim, or otherwise is acting against the doctrine of good faith, you have the right to hold them accountable.

McKennon Law Group is a well-respected California law firm that specializes in holding insurance companies accountable when they act in bad faith. With the help of a legal representative, you can fight back against these unlawful insurance companies and get the compensation you deserve for your insurance claim.