Lincoln National Life Insurance Co. Denies Valid Death Benefit Claims Based on Wrongful Exclusions, Class Action Alleges

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A proposed class action claims that Lincoln National Life Insurance Company has unlawfully denied accidental death and dismemberment (AD&D) insurance claims based on certain claim exclusions that do not conform with California insurance law.

The 16-page complaint was filed by an Illinois beneficiary who argues that Lincoln National Life Insurance Company, who administers group life AD&D insurance policies, wrongfully denied his death benefit claim after his daughter passed away. The case contends that Lincoln National rejected the claim because the AD&D plan at issue does not cover any loss in which intoxication contributed to the cause of an accident. However, the suit counters that the plaintiff’s claim is valid under California state insurance law, which overrides any other exclusions that are "less favorable."

According to the complaint, the plaintiff’s daughter was enrolled in AD&D insurance from Lincoln National through her employer in California. The plan included an intoxication exclusion that purportedly canceled any benefits if alcohol found in a covered individual’s bloodstream "raises a presumption that the Covered Person was under the influence of alcohol and contributed to the reason of the accident," the case relays.

As the lawsuit tells it, the plaintiff's daughter died in November 2021 from blunt force injuries after accidentally falling out of a fourth-story window. Although an autopsy found ethanol in her blood, the complaint alleges that the “evidence of record overwhelmingly establishes” that her death was caused by “accidental bodily injury” sustained in a fall “caused by [the] abrupt opening of the negligently designed window and the failure of a faulty window stop,” and not alcohol intoxication. The filing says that in April 2022, Lincoln National determined “without evidence” that intoxication contributed to the cause of death and denied the plaintiff’s death benefit claim.

According to the complaint, the California Insurance Code includes an intoxication exclusion distinct from the exclusion in the deceased’s AD&D plan, stating that an insurer (emphasis added) “shall not be liable for any loss sustained or contracted in consequence of the insured’s being intoxicated or under the influence of any controlled substance unless administered on the advice of a physician.”

Per the case, California and federal courts have set a precedent that “in consequence of the insured’s being intoxicated” means that intoxication was the “efficient proximate cause” of the covered person’s death, and not just a contributor.

Moreover, the complaint explains that if any insurance policy subject to California insurance law contains an intoxication exclusion “that is less favorable” than the state’s Insurance Code, the language used in the California Insurance Code will take precedent instead.

The filing states that the plaintiff submitted an appeal of Lincoln National’s denial of his claim in August 2022, citing the California Insurance Code and evidence that his daughter’s “efficient proximate” cause of death was not intoxication. The complaint argues that Lincoln National has continued to disregard the statutory language required by California law, and maintains that the plaintiff’s daughter is excluded from the AD&D insurance policy because she was supposedly intoxicated at the time of death.

“Nonetheless, on September 7, 2022, Lincoln National upheld its denial of benefits,” the lawsuit says. “Its claim decision again relied solely on the fact that she was intoxicated at the time of her death, without consideration of the statutory language required by California state law.”

Lincoln National's claim denial amounts to a violation of its fiduciary duties under the Employee Retirement Income Security Act (ERISA) and “demonstrates its pattern and practice of willfully ignoring California state law in order to illegally exclude qualified claims under its group AD&D insurance policies," the case alleges.

The lawsuit looks to cover anyone who made a claim for benefits under a group life or accidental death and dismemberment insurance plan governed by ERISA and the state law of California, whose claim was denied by Lincoln National, in whole or in part, based on a policy exclusion which was less favorable than the statutory language of California Insurance Code.

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