OT: Life Insurance

GrandSalami · 05-10-2008, 06:01 PM

ASHLAND, Mass. (AP) -- When Jenny and John Crowley learned they were having a baby, they did the responsible thing: they bought life insurance.
Barely in their 30s, they passed the insurance company's physicals, applied for a $500,000 policy for Jenny and a $1 million policy for John, and thought they wouldn't have to worry about it for decades.

The Savings Bank Life Insurance Co. of Massachusetts was so taken with the Crowleys, the company used a photograph of their newborn daughter swaddled in a yellow blanket on the cover of one of its brochures.

Just one year later, Jenny was dead of an aggressive form of breast cancer, and when John tried to start his life anew as a single father, SBLI rejected his claim for it to pay his wife's policy. The company claimed that even though doctors said Jenny was healthy, she must have been sick before they agreed to insure her.

"I took solace in the fact that I had this life insurance policy that was designed to protect me financially. Without that, it put a lot of stress on me," John Crowley said. "Financially, I was thinking about how am I going to care for my daughter, how am I going to be a mom and a dad? It's a very rough and kind of scary situation."

Now Crowley is pushing for a change in Massachusetts law that would force an insurer to prove a person misrepresented his well-being or should have known he was not in good health based on "active symptoms of a serious change in health" in order to deny a claim. Under current standards, the responsibility rests with the insured person to prove he didn't know he was ill.

SBLI, which has since settled with Crowley, acknowledges that it changed its own policy several months ago and is now supporting Crowley in his fight for the legislation, dubbed "Jenny's Law."

"Under precedent at the time, it did require that a person be in good health when the policy was issued, even if they didn't know about it," said general counsel Terence O'Malley. "We reviewed all that and agreed that a different standard should apply."

In most states, "good health" is clearly defined in insurance laws, but in Massachusetts the courts have relied on precedent set in cases dating back to 1920 that put the burden on policyholders to demonstrate that they were in good health when the policies were issued.

Under the proposed law, which is expected to come up for a vote this spring, there is a presumption that the policyholder was in good health -- otherwise, the insurer would not have issued a policy.

In Jenny Crowley's case, SBLI cited the "good health" provision, which says the person insured must be in good health when a policy is issued, and the "incontestability" provision, which says that for a certain period after a policy is issued, usually two years, an insurer can rescind a policy or refuse to pay a claim.

Both are standard in life insurance policies, and insurers generally closely scrutinize claims made within the two-year period, said Edward Graves, a professor of insurance at The American College, a financial services college based in Bryn Mawr, Pa.

State Sen. Karen Spilka, who introduced the proposed change to the law, said the provisions are meant to prevent fraud and should not be invoked in cases like Jenny Crowley's.

"When somebody is going through grieving the loss of a spouse, particularly someone so young, to have to think that you've taken all the steps that you're told to be taking, to then find out that well, because of this possible technicality, that you may not get what you thought you were getting is just not fair," she said.

Several state and national insurance associations said it was difficult to estimate how often a case like the Crowleys' could occur.

In July 2004, Jenny Crowley passed a medical exam and blood work done by SBLI.

A month later, her doctor examined her breasts during a postpartum checkup and no abnormalities were noted. Two months later, a doctor noted some breast firmness and suggested that Jenny see a specialist as a precaution. A biopsy showed that she had stage IV breast cancer.

Jenny and John had known each other since elementary school, and were high school sweethearts. John proposed at the top of the Arc de Triomphe in Paris in 1999, and they were married a year later.

John went to work for an accounting firm, while Jenny was an account manager at an advertising agency. In 2002, they bought a house in Ashland, about 25 miles west of Boston. The following year, they were overjoyed when they learned Jenny was pregnant.

They chose SBLI because their rates were competitive, and Jenny had managed the company's advertising. After Kaitlyn was born, SBLI asked if they could use her photo on their marketing brochure.

"If only every decision were as easy as choosing the right life insurance," reads the brochure's headline.

Some in the insurance industry were initially concerned that the proposed legislation would preclude companies from denying claims when they suspect fraud. But the industry now supports the measure.

"We believe the bill strikes a reasonable balance, enabling consumers to challenge claims decisions while preserving insurers' ability to protect against fraud and misrepresentation," said Andrew Calamare, president of the Life Insurance Association of Massachusetts.

John Crowley, now 34, testified before the state legislature about the proposed law.

"I feel like I have a moral obligation to prevent this from happening to anyone else," he said.

Wickedwrister · 05-10-2008, 06:07 PM

Just read the article. The crazy thing is that having the baby might have killed the poor lady a few years earlier. Some of the aggressive breast cancers feed off estrogen and other hormones that are in abundance when you are pregnant. Who knows maybe if she hadn't gotten pregnant they could have caught it earlier and she would have lived. It is very unlikely though because if it went from unnoticeable to stage 4 in a month she was probably screwed either way.

PhillyRocks · 05-10-2008, 06:37 PM

Terrible thing to happen. Good things came out of it. The insurance company knew it was doing wrong, fixed it and now it is supporting the case. Not something you hear every day.

26NuffSaid · 05-10-2008, 06:41 PM

I don't know if we can really say the insurance company "fixed it" with Mr. Crowley.

The article says they settled with him, but it doesn't say how much that settlement was. The full amt of the policy ? We can't assume so.

Rowengartner · 05-10-2008, 06:53 PM

Quote:

Originally Posted by PhillyRocks

Terrible thing to happen. Good things came out of it. The insurance company knew it was doing wrong, fixed it and now it is supporting the case. Not something you hear every day.

They are only trying to save face. No honor in that.

I hate it when I hear these stories, as I am a licensed insurance agent myself. But I represent a company that might be the best at paying claims quickly and with no hassle.

26NuffSaid · 05-10-2008, 07:01 PM

Yeah, as a member of the insurance industry, stories like that bug me, too. The public is already misinformed about our business, we sure don't need stories like this one to damage our reputations.

PhillyRocks · 05-10-2008, 07:08 PM

Why is it that the 2 who work for the insurance industry look at the negative side? I am sure there where channels that ran its course, but somebody did something when they really didn't have too. Settled means both parties were satisfied.

They still do not have to fight for the "Jenny Law" being an insurance company. This is a good thing. Both for real life and the insurance company PR.

26NuffSaid · 05-10-2008, 07:13 PM

Settled does not mean both are satisfied. The insured may have accepted, say, $10,000 because he knew the law was not in his favor and realized it was useless to try to get more.

So, was he happy with the settlement ? We don't know.

My comment was simply that the perception of the public from this whole story is, "Big Bad Insurance Industry Screwing Over The Poor Widower".

So, whether this company did the right thing or not, it was too late to avoid the negative publicity.

Wickedwrister · 05-10-2008, 07:19 PM

Quote:

Originally Posted by PhillyRocks

Why is it that the 2 who work for the insurance industry look at the negative side? I am sure there where channels that ran its course, but somebody did something when they really didn't have too. Settled means both parties were satisfied.

They still do not have to fight for the "Jenny Law" being an insurance company. This is a good thing. Both for real life and the insurance company PR.

Settled doesn't mean anything.

If his options are get nothing because legally the company is right or here is 50 grand instead of the 500 grand you want, he may have taken the 50 grand.

phightins'20 · 05-10-2008, 09:17 PM

I'm also licensed to sell life insurance and the company gets access to all of her medical records before they issue the policy. Unless there was intentional fraud covering up her condition, that claim should be paid. The company made the decision to insure her. And the two year incontestability period should not be used not to pay a claim if the insured had no idea of the illness. The policy can be contested if it is found the insured purposely lied on an application such as claiming to be a non smoker when they smoke or also to protect against suicides. After 2 years a company would have to pay on a suicide and at that point could only change the policy if someone lied about their age. It is hard enough to sell life insurance because it's not something people like to think about but they need it. I was told early in my career that investments are bought but life insurance has to be sold. And it is so important to have it to replace income in case of death, most people that have it are underinsured. This gives people another excuse not to be properly insured b/c they will say that the company may not pay anyway.

PhillyRocks · 05-11-2008, 02:02 AM

Quote:

Originally Posted by Wickedwrister

Settled doesn't mean anything.

If his options are get nothing because legally the company is right or here is 50 grand instead of the 500 grand you want, he may have taken the 50 grand.

Or maybe he got the 500 grand or maybe even 350 and they are paying the lawyers for the law.

If the insurance company itself is backing this law, and now the whole insurance industry is backing this law. If the husband took the insurance company to court, no doubt the insurance company would have to pay up. My guess, he got the whole thing. They settled so obviously it was over 10 grand or It would have been worth it to take them to court.

We don't know but we don't have to assume that he got chump change.

PhillyRocks · 05-11-2008, 02:27 AM

Wickedwrister · 05-11-2008, 06:37 AM

Quote:

Originally Posted by PhillyRocks

Or maybe he got the 500 grand or maybe even 350 and they are paying the lawyers for the law.

If the insurance company itself is backing this law, and now the whole insurance industry is backing this law. If the husband took the insurance company to court, no doubt the insurance company would have to pay up. My guess, he got the whole thing. They settled so obviously it was over 10 grand or It would have been worth it to take them to court.

We don't know but we don't have to assume that he got chump change.

I know, we can't assume he got a lot either. All we know is he got something.

robo · 05-11-2008, 08:57 AM

When the last of our children got married we sold our policy.

Booksie · 05-11-2008, 09:22 AM

My ex-wife's mother was killed in a crash a year ago by a guy who was convicted on two counts of driving while impaired. So far, State Farm is trying to get out of paying her policy. I've advised the ex to go to the newspapers with the story, but so far, she hasn't done so (her mother lived in upstate New York). She and her brother are considering suing the company, but State Farm has deep pockets and, apparently, shallow ethics.

About 18 months ago, I dropped State Farm and "saved a bunch of money" by going to Geico. I don't delude myself that Geico is in any way altruistic, but it's obvious that State Farm's corporate policy on payoffs is that of the Mafia.

Ken in Florida

05-10-2008, 06:01 PM	#1
GrandSalami Creator of the RNN Join Date: Dec 2002 Location: Lancaster County, PA Posts: 22,855	OT: Life Insurance ASHLAND, Mass. (AP) -- When Jenny and John Crowley learned they were having a baby, they did the responsible thing: they bought life insurance. Barely in their 30s, they passed the insurance company's physicals, applied for a $500,000 policy for Jenny and a $1 million policy for John, and thought they wouldn't have to worry about it for decades. The Savings Bank Life Insurance Co. of Massachusetts was so taken with the Crowleys, the company used a photograph of their newborn daughter swaddled in a yellow blanket on the cover of one of its brochures. Just one year later, Jenny was dead of an aggressive form of breast cancer, and when John tried to start his life anew as a single father, SBLI rejected his claim for it to pay his wife's policy. The company claimed that even though doctors said Jenny was healthy, she must have been sick before they agreed to insure her. "I took solace in the fact that I had this life insurance policy that was designed to protect me financially. Without that, it put a lot of stress on me," John Crowley said. "Financially, I was thinking about how am I going to care for my daughter, how am I going to be a mom and a dad? It's a very rough and kind of scary situation." Now Crowley is pushing for a change in Massachusetts law that would force an insurer to prove a person misrepresented his well-being or should have known he was not in good health based on "active symptoms of a serious change in health" in order to deny a claim. Under current standards, the responsibility rests with the insured person to prove he didn't know he was ill. SBLI, which has since settled with Crowley, acknowledges that it changed its own policy several months ago and is now supporting Crowley in his fight for the legislation, dubbed "Jenny's Law." "Under precedent at the time, it did require that a person be in good health when the policy was issued, even if they didn't know about it," said general counsel Terence O'Malley. "We reviewed all that and agreed that a different standard should apply." In most states, "good health" is clearly defined in insurance laws, but in Massachusetts the courts have relied on precedent set in cases dating back to 1920 that put the burden on policyholders to demonstrate that they were in good health when the policies were issued. Under the proposed law, which is expected to come up for a vote this spring, there is a presumption that the policyholder was in good health -- otherwise, the insurer would not have issued a policy. In Jenny Crowley's case, SBLI cited the "good health" provision, which says the person insured must be in good health when a policy is issued, and the "incontestability" provision, which says that for a certain period after a policy is issued, usually two years, an insurer can rescind a policy or refuse to pay a claim. Both are standard in life insurance policies, and insurers generally closely scrutinize claims made within the two-year period, said Edward Graves, a professor of insurance at The American College, a financial services college based in Bryn Mawr, Pa. State Sen. Karen Spilka, who introduced the proposed change to the law, said the provisions are meant to prevent fraud and should not be invoked in cases like Jenny Crowley's. "When somebody is going through grieving the loss of a spouse, particularly someone so young, to have to think that you've taken all the steps that you're told to be taking, to then find out that well, because of this possible technicality, that you may not get what you thought you were getting is just not fair," she said. Several state and national insurance associations said it was difficult to estimate how often a case like the Crowleys' could occur. In July 2004, Jenny Crowley passed a medical exam and blood work done by SBLI. A month later, her doctor examined her breasts during a postpartum checkup and no abnormalities were noted. Two months later, a doctor noted some breast firmness and suggested that Jenny see a specialist as a precaution. A biopsy showed that she had stage IV breast cancer. Jenny and John had known each other since elementary school, and were high school sweethearts. John proposed at the top of the Arc de Triomphe in Paris in 1999, and they were married a year later. John went to work for an accounting firm, while Jenny was an account manager at an advertising agency. In 2002, they bought a house in Ashland, about 25 miles west of Boston. The following year, they were overjoyed when they learned Jenny was pregnant. They chose SBLI because their rates were competitive, and Jenny had managed the company's advertising. After Kaitlyn was born, SBLI asked if they could use her photo on their marketing brochure. "If only every decision were as easy as choosing the right life insurance," reads the brochure's headline. Some in the insurance industry were initially concerned that the proposed legislation would preclude companies from denying claims when they suspect fraud. But the industry now supports the measure. "We believe the bill strikes a reasonable balance, enabling consumers to challenge claims decisions while preserving insurers' ability to protect against fraud and misrepresentation," said Andrew Calamare, president of the Life Insurance Association of Massachusetts. John Crowley, now 34, testified before the state legislature about the proposed law. "I feel like I have a moral obligation to prevent this from happening to anyone else," he said.

05-10-2008, 06:07 PM	#2
Wickedwrister Troll fighting=Civic Duty Join Date: Aug 2006 Location: Absecon/East Falls Posts: 7,948	Just read the article. The crazy thing is that having the baby might have killed the poor lady a few years earlier. Some of the aggressive breast cancers feed off estrogen and other hormones that are in abundance when you are pregnant. Who knows maybe if she hadn't gotten pregnant they could have caught it earlier and she would have lived. It is very unlikely though because if it went from unnoticeable to stage 4 in a month she was probably screwed either way. __________________ "This changes everything" -My brother minutes after the Phillies won the WS. "Here's whats lucky for them. They don't have to play the Phillies anymore because the Phillies could beat them 162 times in a row if they played them" -Tony Kornheiser on the Mets (September 2007) The Best Team Won

05-10-2008, 06:37 PM	#3
PhillyRocks Needs to ride his bike. Join Date: Jul 2006 Location: New Jersey Posts: 14,141	Terrible thing to happen. Good things came out of it. The insurance company knew it was doing wrong, fixed it and now it is supporting the case. Not something you hear every day. __________________ RIP Harry. You will live forever, summers will never be the same

05-10-2008, 07:08 PM	#7
PhillyRocks Needs to ride his bike. Join Date: Jul 2006 Location: New Jersey Posts: 14,141	Why is it that the 2 who work for the insurance industry look at the negative side? I am sure there where channels that ran its course, but somebody did something when they really didn't have too. Settled means both parties were satisfied. They still do not have to fight for the "Jenny Law" being an insurance company. This is a good thing. Both for real life and the insurance company PR. __________________ RIP Harry. You will live forever, summers will never be the same

05-10-2008, 09:17 PM	#10
phightins'20 Registered User Join Date: Dec 2006 Location: Hanover Twp. PA Posts: 313	I'm also licensed to sell life insurance and the company gets access to all of her medical records before they issue the policy. Unless there was intentional fraud covering up her condition, that claim should be paid. The company made the decision to insure her. And the two year incontestability period should not be used not to pay a claim if the insured had no idea of the illness. The policy can be contested if it is found the insured purposely lied on an application such as claiming to be a non smoker when they smoke or also to protect against suicides. After 2 years a company would have to pay on a suicide and at that point could only change the policy if someone lied about their age. It is hard enough to sell life insurance because it's not something people like to think about but they need it. I was told early in my career that investments are bought but life insurance has to be sold. And it is so important to have it to replace income in case of death, most people that have it are underinsured. This gives people another excuse not to be properly insured b/c they will say that the company may not pay anyway. Last edited by phightins'20 : 05-10-2008 at 09:22 PM. Reason: want to add something

05-10-2008, 06:41 PM	#4
26NuffSaid World F'N Champions !!! Join Date: Jan 2008 Posts: 16,777	I don't know if we can really say the insurance company "fixed it" with Mr. Crowley. The article says they settled with him, but it doesn't say how much that settlement was. The full amt of the policy ? We can't assume so.

05-10-2008, 07:01 PM	#6
26NuffSaid World F'N Champions !!! Join Date: Jan 2008 Posts: 16,777	Yeah, as a member of the insurance industry, stories like that bug me, too. The public is already misinformed about our business, we sure don't need stories like this one to damage our reputations.

05-10-2008, 07:13 PM	#8
26NuffSaid World F'N Champions !!! Join Date: Jan 2008 Posts: 16,777	Settled does not mean both are satisfied. The insured may have accepted, say, $10,000 because he knew the law was not in his favor and realized it was useless to try to get more. So, was he happy with the settlement ? We don't know. My comment was simply that the perception of the public from this whole story is, "Big Bad Insurance Industry Screwing Over The Poor Widower". So, whether this company did the right thing or not, it was too late to avoid the negative publicity.

05-11-2008, 02:27 AM	#12
PhillyRocks Needs to ride his bike. Join Date: Jul 2006 Location: New Jersey Posts: 14,141	__________________ RIP Harry. You will live forever, summers will never be the same

05-11-2008, 08:57 AM	#14
robo New Baby Brian Join Date: Mar 2002 Location: Phila. Pa. USA Posts: 12,912	When the last of our children got married we sold our policy. __________________ WELCOME iBANEZ. RYAN, LAST MAN STANDING.. OOPS, JUST SAT DOWN.

05-11-2008, 09:22 AM	#15
Booksie Boycott Citgo! Join Date: Jun 2002 Location: Niceville, FL, USA Posts: 4,452	My ex-wife's mother was killed in a crash a year ago by a guy who was convicted on two counts of driving while impaired. So far, State Farm is trying to get out of paying her policy. I've advised the ex to go to the newspapers with the story, but so far, she hasn't done so (her mother lived in upstate New York). She and her brother are considering suing the company, but State Farm has deep pockets and, apparently, shallow ethics. About 18 months ago, I dropped State Farm and "saved a bunch of money" by going to Geico. I don't delude myself that Geico is in any way altruistic, but it's obvious that State Farm's corporate policy on payoffs is that of the Mafia. Ken in Florida __________________ “The difference between Democrats and Republicans is: Democrats have accepted some ideas of Socialism cheerfully, while Republicans have accepted them reluctantly”--Norman Thomas, six-time presidential candidate, Socialist Party of America

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