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Volume XII, Number 224

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Preliminary Steps To Change Beneficiary Did Not Constitute Substantial Compliance With Life Illinois Insurance Policy Requirements

The decedent worked as a pharmacist for SuperValu. He died of a heart attack and was survived by a wife of three years and three children. As part of his employment benefits, Minnesota Life had an insurance policy with death benefits of $415,000. Its terms stated that if a policyholder failed to designate a beneficiary at the date of death, the proceeds would pass to the policyholder's spouse. Shortly after the death, the children found a change of beneficiary form that was completed by their father more than a year before his death but never submitted to Minnesota Life. Defendant then submitted a claim for the policy proceeds, and Minnesota Life filed the present interpleader action asking the court to determine the appropriate beneficiary. The trial court entered summary judgment in favor of the wife.

The Seventh Circuit affirmed. The Court noted that exact compliance with insurance policy terms is not required in Illinois as long as there is substantial compliance. However, it held decedent did not substantially comply with the policy requirements as he had 15 months before his death to return the completed form, but never did so. Minnesota Life Ins. Co. v. Kagan, 724 F.3d 843 (7th Cir. 2013).

© 2022 Heyl, Royster, Voelker & Allen, P.CNational Law Review, Volume IV, Number 316
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About this Author

Success in litigating insurance coverage issues hinges on understanding both the interpretation of insurance policies and the handling of claims. These key elements pervade every phase of the business from taking the application, through underwriting, and policy issuance. The members of our firm's insurance coverage practice group understand these elements and the important role they play in risk management. 

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