Life Insurance Shenanigans

When does a life insurance policy pay?

When the insured dies.

Unless of course the insurer decides the policy holder bought too much insurance.

U.S. District court judge William Acker ruled that Mega life must pay $960,832 in death benefits plus interest.

Kellie Pieniozek, 23, of Calera, died Dec. 14, 2004, in a one-car accident in Shelby County. The Pieniozeks were driving home when a deer ran onto the road and Kellie Pieniozek lost control of the vehicle and struck a culvert. She died at Shelby Baptist Medical Center.

Donald Pieniozek's attorney, Roland Gamble, said Pieniozek attempted to claim a life insurance policy the couple took out in September 2004, but the company denied it because the insurance form listed Kellie Pieniozek's yearly income as $35,000.

Mega Life contended she made far less, as she was employed in a series of temporary jobs. The company would never have issued a policy with a high death benefit for someone with a smaller income, it stated in court documents. Mega Life's underwriting guidelines called for a death benefit 15 times the insured person's yearly income.

Nothing in the article confirms Mega's contention that Mrs. Pieniozek earned less than $35,000. Trying to fight a claim on a vague claim that the insured earned "far less" is shallow at best.

"That figure and the method it was arrived at were never questioned by Mega Life's underwriters until after the insured's accidental death," Acker wrote. "Mega Life perhaps, in its own interests, should have been more careful in establishing and enforcing underwriting guidelines."

More careful indeed.