Even though many people do not like to contemplate the end of life, that should not preclude them from considering the need for life insurance. A life insurance company provides a valuable commodity for the surviving family members when the policy holder dies. However, simply due to the nature of the business, many of these companies may find themselves facing allegations of bad faith in a New York courtroom.
Two siblings filed a claim against Life Insurance Company of North America that was recently transferred to federal jurisdiction. The women claim that the insurer acted in bad faith and committed theft after the handling of their father’s insurance policy. According to the narration provided by the women, their father held two insurance polices through his employer that was serviced by LICNA. The women claimed that although their step mother was the designated beneficiary of both polices, their late father has tried to change the beneficiary designation before his death to name both daughters as beneficiaries.
A few months after her father’s death, one daughter called the employer and inquired whether there was any money due to her late father’s estate. She was purportedly informed that, without her knowledge, she had been named as beneficiary and that the company would be issuing payouts according to the terms of the policy. Shortly afterwards, her sister received a check for approximately half of the total value, and the other daughter was told she was approved to receive her share of the benefits.
Later that month, she was informed that all monies needed to be returned, including the amount she had withdrawn from her insurance account. A few months later, the estate received a check for the same amount that the company previously demanded be returned. Both of the plaintiffs allege that the ex-wife received the payments in error and that the insurance company acted in bad faith. New York companies that find themselves facing these accusations are assured of the right to vigorously defend their policies and decisions based on the standard policies that apply in the given circumstances.
Source: wvrecord.com, “Daughters sue Life Insurance Company of North America for not properly paying insurance benefits“, Kyla Asbury, June 23, 2017