Employees in Chicago with employer sponsored life and accidental death insurance coverage under an ERISA plan often do not realize the difference between accidental death insurance and life insurance. It sounds self-explanatory, but it can often be more confusing than it seems. Life insurance will provide coverage in nearly all causes of death, including sickness or illness, with some exclusion for intentionally inflicted injuries and other similar events. Accidental death insurance covers a far more limited range of causes of death, and the wording of the definition of Covered Loss could raise more questions than answers. As we commonly think about a death being “accidental,” it is accidental either because the event causing the death was unexpected, or the resulting death was unexpected from a foreseeable cause. An example of an unexpected means accidental death would be driving a car in compliance with state laws and getting hit by a truck, causing death. The collision was unexpected. On the other hand, an unintentional drug overdose may have intentional means, but a completely unanticipated result.
This distinction proved to be critical in a recent case where we convinced the insurer to pay an accidental death insurance claim for a client whose father was in hospice care on disability leave, with numerous terminal illnesses, and expected to pass from those illnesses in the next few months. In his weakened state, the insured had fallen down numerous times in the previous month. His last fall proved to be fatal, though nobody suspected it had serious consequence. The insured fractured several ribs in the fall, trying to use his bedside commode, and the fractures punctured his lung. Because none of the previous falls resulted in any serious injury, nobody suspected this fall had such devastating consequences. One week after the fall, the insured died from a collapsed lung.
The insurer initially denied the claim, insisting that the insured’s history of falling down made it expected he would fall again, and the fall ultimately caused the death. Most accidental death insurance policies are worded to provide precisely this type of insurance. They insure against unexpected events that cause death. This policy, however, worded “Covered Loss” to be a death from an unexpected injury, meaning even if the event causing injury was foreseeable, there is a Covered Loss if the resulting injury were unexpected. We successfully argued that this policy insured unexpected results even from anticipated means, resulting in a full payment of the claim and avoiding litigation under ERISA section 502. These distinctions seem subtle, but can dictate the outcome of an accidental death insurance claim.
If you have a claim for accidental death insurance benefits, call a knowledgeable ERISA attorney today.