Legal Question in Insurance Law in Indiana

Can a company deny to honor a dependent life insurance claim with the following situation? : My mother in law and father in law both worked for the same company for 10 years. Both had life insurance policies for themselves as well as dependent life insurance policies for each other. My father in law recently passed away. The company was purchased 2 years ago by another company. So the new company is refusing to honor the dependent life insurance policy stating it is cross coverage and not allowed. They are offering to refund 2 years of premium. Is this legal? Can this be construed as detrimental reliance? 10 years of paying 2 premiums and then when the event happens, oops I'm sorry you should have never had this coverage to begin with!!

Asked on 10/19/10, 12:05 pm

1 Answer from Attorneys

Aaron Butler Aaron J. Butler, Attorney at Law

This is not a yes/no type of question. Insurance policies are very complicated and lawsuits are often the result of coverage disputes. Sometimes the insured do win these lawsuits. Insurance companies do make mistakes. They will also attempt to deny close cases, as they have little to lose by doing so, and a lot to gain if the insured gives up without a fight.

Your monther in law should consult an attorney who practices insurance coverage litigation, and have them carefully review the reasons that coverage is being denied, the insurance policy, and of course the relevant statutes of limitations and incontestability issues.

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Answered on 10/25/10, 7:19 am

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