Nothing is Automatic

I worked for a carrier a number of years ago that sold group term life insurance and practically nothing else. It was a relatively simple job. You write a case and at renewal tell the client their rate will be the same as it was last year.

I used to tell people there was nothing to this. The policy was simple. If you die we pay if you don't we don't.

It doesn't get much more simple than that.

But the life insurance business isn't always that easy. Take the case of Heath Ledger.

Heath is an actor who died earlier this year. He is best known for his role in Brokeback Mountain and more recently, as the Joker in the Batman flick, The Dark Knight.

According to reports Heath died of "an accidental drug overdose."

He had a $10,000,000 policy through ING/ReliaStar.

Paying the claim should be a no brainer, right?

Not necessarily.

ReliaStar states in its legal response it is seeking more information about whether Ledger may have lied on paperwork and about whether his death may have been a suicide.

May have lied . . . on his application.

May have . . . been a suicide.

Sounds like they don't want to turn loose of the $10M.

Can't say I blame them. That's a lot of money.

William Shernoff, the lawyer representing LaViolette and Matilda Rose, said ReliaStar has told him it will seek the depositions of a masseuse who found Ledger's body and of actress Mary-Kate Olsen, who received a flurry of phone calls after the body was found.

The insurance company's lawyers also want to question Ledger's co-stars, agents and doctors, Shernoff said.

Most folks don't know it, but the carrier has 2 years after the policy is issued to review all pertinent facts and make a decision if the contract (and any ensuing claim) is valid. Almost all death claims that occur within the first 2 years are fully explored to determine if relevant information was withheld, intentionally or otherwise, from the application.

Nothing is automatic.

Not even death claims.