Life Insurance Trusts v. Indianapolis Life Insurance Company (Life Insurance, Bad Faith).
This case involved the pre-suit settlement of several life insurance claims for $6,500,000.00, over 90% of the value of the policies. The Insurer wrote $7,000,000.00 in coverage on an 80 year old man with a history of bladder cancer, longstanding high blood pressure and a first degree atrioventricular block. The insured died less than two years after becoming insured, and the insurer denied the family’s claims, asserting that the deceased had not disclosed important information about his cardiac history on his policy applications. Counsel developed expert proof demonstrating that the insured had in fact disclosed everything of which he was aware, that the insurance company knew everything it needed to know to make its underwriting decision, and that its asserted defense was illegal. After considering counsel’s letter requesting reconsideration, the insurer settled the claims for 93% of the value of the policies.