Case library
Major life insurance court decisions
The decisions that shape how delayed and denied life and AD&D claims are decided. Each summary links to the full opinion on a court or public law library website, so you can read it yourself.
Contestability, fraud, incontestability and insurable interest
- Mutual Benefit Life Ins. Co. v. JMR Electronics Corp., 848 F.2d 30 (2d Cir. 1988). A false non-smoker answer was material and allowed rescission during the contestable period.
- American National Ins. Co. v. Arce, No. 21-0843 (Tex. 2023). Texas life insurers must prove intent to deceive, not just a material misstatement.
- Burley v. New York Life Ins. Co., No. CA 15-263 (La. App. 3 Cir. 2015). Under La. R.S. 22:860 the insurer must prove intent to deceive or materiality. Cause of death is irrelevant to materiality.
- Amex Life Assurance Co. v. Superior Court, 14 Cal.4th 1231 (Cal. 1997). After two years, an impostor at the medical exam was not grounds to contest the policy when the insured himself applied.
- Grigsby v. Russell, 222 U.S. 149 (1911). The owner of a valid policy may sell it to someone without an insurable interest.
- PHL Variable Ins. Co. v. Price Dawe 2006 Ins. Trust, 28 A.3d 1059 (Del. 2011). A policy with no insurable interest at inception (STOLI) is void, so incontestability never applies.
- Massachusetts Mutual Life Ins. Co. v. Manzo, 122 N.J. 104 (N.J. 1991). In New Jersey, a life insurer can rescind for a knowing, material misstatement within the contest period without proving intent to deceive.
- Kramer v. Phoenix Life Ins. Co., 15 N.Y.3d 539 (N.Y. 2010). New York lets an insured buy a policy on his own life and immediately assign it to an investor.
Delay and bad faith
- Gruenberg v. Aetna Ins. Co., 9 Cal.3d 566 (Cal. 1973). Unreasonably withholding benefits owed to a policyholder can be a tort.
- Egan v. Mutual of Omaha Ins. Co., 24 Cal.3d 809 (Cal. 1979). Failing to investigate a claim properly before denying it breaches the duty of good faith.
- Pickett v. Lloyd's, 131 N.J. 457 (N.J. 1993). New Jersey recognizes a first-party bad-faith claim for denying or delaying a claim that is not fairly debatable.
- Rancosky v. Washington National Ins. Co., 170 A.3d 364 (Pa. 2017). Pennsylvania bad faith under 42 Pa.C.S. ยง 8371 needs no proof of ill will, only no reasonable basis plus knowledge or reckless disregard.
- Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987). ERISA preempts common-law bad-faith claims over benefit processing under employer plans.
- Hall v. Globe Life & Accident Ins. Co., 1999 OK 89, 998 P.2d 603. In Oklahoma, a beneficiary who won a litigated life claim got 15% interest, not the 3% late-payment rate.
Lapse and notice
- McHugh v. Protective Life Ins. Co., 12 Cal.5th 213 (Cal. 2021). California's 60-day grace and lapse-notice statutes cover every policy in force on January 1, 2013.
Employer group life (ERISA)
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989). Denials are reviewed de novo unless the plan gives the administrator discretion.
- Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (2008). An insurer that decides and pays claims has a conflict that courts weigh in reviewing a denial.
- McCravy v. Metropolitan Life Ins. Co., 690 F.3d 176 (4th Cir. 2012). A beneficiary whose premiums were taken for coverage that never existed is not limited to a refund; surcharge and estoppel are available under ERISA.
- Silva v. Metropolitan Life Ins. Co., 762 F.3d 711 (8th Cir. 2014). Payroll deductions with no statement of health on file: fact questions on the denial, and equitable claims allowed alongside the benefits claim.
- Vest v. Resolute FP US Inc., No. 18-5046 (6th Cir. 2018). There is no general ERISA duty to send a personal notice of group life conversion rights (split panel).
Beneficiary disputes under employer plans
- Egelhoff v. Egelhoff, 532 U.S. 141 (2001). Federal law overrides state revoke-at-divorce statutes for ERISA group life.
- Kennedy v. Plan Administrator for DuPont, 555 U.S. 285 (2009). Administrators pay the beneficiary named under the plan documents.
Accidental death (AD&D)
- Wickman v. Northwestern National Ins. Co., 908 F.2d 1077 (1st Cir. 1990). The subjective and objective expectation test for whether a death was an accident.
- King v. Hartford Life & Accident Ins. Co., 414 F.3d 994 (8th Cir. 2005) (en banc). An insurer could not defend an AD&D denial in court on a different standard from the one it used to deny the claim.
- Lennon v. Metropolitan Life Ins. Co., 504 F.3d 617 (6th Cir. 2007). A plan could reasonably treat a death from extreme drunk driving as not accidental.
- Kovach v. Zurich American Ins. Co., 587 F.3d 323 (6th Cir. 2009). A crash by an intoxicated rider was still an accident where the plan had no drunk-driving exclusion.
- Danouvong v. Life Ins. Co. of N. Am., 659 F. Supp. 2d 318 (D. Conn. 2009). A blanket intoxication-equals-foreseeable denial was arbitrary. The claim went back for an individualized decision.
- Murchison v. Reliance Standard Life Ins. Co., No. 1:19-cv-01028 (W.D. Tenn. 2020). Toxicology alone did not show alcohol or hydrocodone was a contributing factor in a fatal ATV rollover. The denial was reversed.
Slayer rule
- Mutual Life Ins. Co. of New York v. Armstrong, 117 U.S. 591 (1886). A person who kills the insured forfeits any right to the proceeds.
Not legal advice. Court decisions apply to their own facts and jurisdictions, and later decisions or statutes can change the law. See the disclaimer and editorial policy.