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Insurance firm allegedly refuses to pay $40K benefits
Husband died a month after wife applies for family’s insurance policy
A widow has sued an insurance company for allegedly refusing to pay her $40,000 in benefits for the death of her husband, who died a month after she applied for her and her family’s life insurance.
Marivic Tumalad, through counsel William M. Fitzgerald, is suing Individual Assurance Co. for breach of contract, breach of duty of good faith and fair dealing, and intentional infliction of emotional distress.
Tumalad is suing for unspecified damages.
Saipan Tribune contacted IAC yesterday, but a representative said he is not allowed to comment.
Fitzgerald stated in the complaint that Tumalad applied on Jan. 15, 2013, for dependent life benefits under the CNMI Group Life Insurance Program, underwritten by IAC, to cover herself, her husband, and her son.
Fitzgerald said IAC issued a written policy of insurance and promised to pay Tumalad $40,000 upon the death of her husband.
As part of the “health statement of employee and dependent”, Tumalad was asked if she or any of her dependents had ever been treated for or diagnosed as having “liver or kidney disease.”
Fitzgerald said Tumalad truthfully answered this question by marking the box on the form denominated “NO” for herself, her spouse, and her son.
Tumalad’s husband, Arsenio, died on Feb. 21, 2013, and the cause was listed as hepatorenal syndrome.
Tumalad then filed a claim for dependent life benefits under the CNMI Group Life Insurance Program.
Fitzerald said that, on April 23, 2013, IAC denied Tumalad’s claim on the grounds that Arsenio had been diagnosed or treated for a liver disease at the time she answered the health statement in the negative.
IAC maintained that this was a false statement because Arsenio had been diagnosed and treated for a liver disease prior to Jan. 15, 2013.
Tumalad responded by informing the insurance company that this was incorrect and that Arsenio had never been treated for nor diagnosed with liver disease prior to Jan. 15, 2013.
Tumalad said Arsenio was only told that there was a mass on his liver.
Fitzgerald said IAC informed Tumalad that “the follow-up visit due to a diagnosis of liver mass and advisement to seek further medical evaluation due to the diagnosis of a liver mass is treatment for a liver disease.”
“This statement was false and was intentionally and maliciously made by the defendant for the purpose of avoiding the payment that was due,” the lawyer pointed out.
Fitzgerald asserted that IAC should have been aware that liver problems include a wide range of diseases and conditions that affect the liver and that not all liver problems are considered a disease.
He noted liver mass or non-cancerous benign liver tumors are common, do not spread to other areas of the body, and do not pose a serious health risk.
