Lawsuit Over Life Insurance Coverage Settled

Posted on Jun 15, 2015

The Mottley Law Firm PLC is pleased to announce the settlement of a lawsuit brought by Kevin W. Mottley in 2014 to recover life insurance proceeds for the surviving husband of a woman who passed away in 2012.  When the wife passed away, she believed her husband would receive the proceeds of an employment-related life insurance policy from her previous employer.  Unfortunately, that was not to be the case.  As the husband soon discovered, the life insurance company denied the claim because the wife was not employed by the employer at the time of her death.  Such employer-related group life insurance policies typically have provisions limiting coverage to "employees."  And the wife, of course, was not an employee.  If that was all there was to the story, that would be the end of it. 

But that was not the entire story.  It turns out that one of the managers of the employer company had promised the wife that, if she retired on her 65th birthday, and if she continued to make the policy payments on the policy after her retirement, then the employer would make sure she remained covered by the life insurance program.  And so that is what she did.  She retired on her 65th birthday.  And every month for three years, the wife diligently and religiously paid her modest life insurance premium to the employer.  The employer, in turn, paid it over to the life insurance company as part of its overall premium for all of its "employees".  Interestingly, when it did so, the employer repeatedly (and falsely) represented to the life insurance company that the wife was an "employee" when, in fact, she was not.  It was not until after the wife's death that the insurance company investigated the claim and denied it because she was not an employee at the time of her death.

Kevin W. Mottley sued the company on behalf of the estate for fraud and breach of contract.  As the result of a mediation conducted in early June, the case settled.  The details of the settlement are confidential and, for that reason, the names of the parties and the details have been left out of this report.  However, Kevin reports, "this was one of the most satisfying cases and results of my career.  These types of cases, where I'm helping someone who has been wronged, are the most satisfying to me."