When an individual has a life insurance policy provided by her employer, it is called a group life insurance policy. When the insured stops working for the employer, she may have the right to port or convert her group coverage into an individual policy to ensure continuous coverage. Many times, however, an insured fails to convert or port her life insurance coverage.
To make sure an insured carried coverage under a converted or continued policy, she must have applied for converted or continued coverage by a designated deadline. Many group policies set forth the process and applicable deadlines for submission of a conversion application or a portability request. When an insured neglects to follow the instructions outlined in the policy, the insured risks a lapse in coverage. However, an insured may be relieved of this duty if there are extenuating circumstances:
- The insured was never given a copy of the policy. Needless to say, an insured cannot comply with the policy’s continuation or conversion application deadline if the insured was never provided with a copy or the policy or an access to the plan documents. In the majority of group life insurance cases, the plan administrator must provide a copy of the policy to all participants in the plan and may be liable for denial of benefits if it failed to do so.
- The insured was not made aware of his duty to apply for continued or converted coverage. Most group life insurance plans are subject to ERISA. ERISA does not impose a duty on a plan to provide notice to plan participants other than the summary plan description and information of the benefits plan. Although ERISA does not require insurance companies or employers to provide an insured additional notice of a right to continue or convert coverage, some plan employers assume this duty voluntarily. If an employer promised an insured to send her all the necessary notices for conversion or portability, but failed to do so, the employer may be liable for the denied claim.
- The insured received misleading information from her employer regarding the process of conversion or portability. Any notice that is provided by an employer or an insurance company should be clear and unambiguous. If an employer provided incorrect or misleading information regarding an insured’s conversion or portability right, the employer may be liable for the total amount of the denied life insurance claim. Some examples of misleading or ambiguous conversion notices are notices that do not inform an insured of the deadline or the procedure for applying; notices sent to the wrong address or the wrong person, notices received by an insured after the deadline for applying, etc.
What recourse do you have as a beneficiary whose claim has been denied due to the insured’s failure to convert or port coverage? You may have a claim against the insured’s employer and the insurance company for the total amount of the denied claim. Call our life insurance attorneys at 1-888-510-2212 for a free consultation.