A Missouri federal court denied a widow the benefits from her deceased husband’s life insurance policy upon finding that the decedent made a misrepresentation in his policy application. West v. Wilton Reassurance Life Co., No. 08-CV-0425(W)(SOW) (W.D.Mo. Mar. 9, 2009).

On January 19, 2005, the decedent saw his physician complaining of a host of symptoms. On January 20, 2005, the decedent underwent a CT Scan and MRI, which uncovered the presence of a neoplastic brain tumor. That evening, the decedent was admitted to this hospital. On January 24, 2005, the decedent completed a life insurance policy application designating the plaintiff, his wife, as the sole beneficiary. The application asked whether, during the past 12 months, the decedent had “been hospitalized for 5 or more consecutive days, other than for conditions from which you have fully recovered?” In response to that question, the decedent answered “no.” The decedent underwent surgery on January 25, 2005 and was discharged on January 27, 2005. He passed away on December 1, 2006.

After denying the plaintiff’s claim for insurance proceeds, the insurer rescinded the policy and refunded the premiums, claiming that it would not have issued the policy had the decedent been truthful in the application. The dispute centered on the concept of “consecutive days of hospitalization.”

The plaintiff argued that because the decedent was admitted on the evening of January 20, 2005 and completed his application on January 24, 2005, he had not been hospitalized for a full five days and, therefore, did not make a misrepresentation in the application. The insurer maintained that the phrase “consecutive days of hospitalization” includes partial days and, therefore, the decedent was in the fifth day of his hospitalization at the time he completed the application. The court agreed with the insurer.

The court held that, in Missouri, an insurer is not required to show proof of an intent to deceive to establish misrepresentation “if a material representation is warranted to be true, the policy is conditioned upon the truth of the representations, the policy provides that the falsity of the representations shall avoid the policy, or the application is incorporated into the attached policy.”

The court concluded that the representation of the decedent’s hospitalization history was false, and material. The court noted that the insurer’s underwriting system was set up so that if a “yes” answer had been provided in response to the subject question, a life insurance policy would not have automatically issued. Therefore, the court found that the insurer would not have issued the policy if the decedent had responded truthfully. That, coupled with the finding that the misrepresentation directly related to the decedent’s cause of death, led the court to conclude that the misrepresentation was material. Accordingly, the court entered judgment in favor of the insurer.

For a copy of the opinion, please click here.