Death Comes Too Late For Life Insurance Proceeds

It’s been years since I read Anthony Trollope’s Barchester Towers in Robert Scheeler’s English Lit. class at Minot State College, but I still remember the story pretty well. The plot begins with the death of an Anglican bishop, which comes a few hours too late for his son to be appointed to replace him. Instead, a new government was seated and installed its own choice.
Cummings v. Life Ins. Co. of North America, 2006 WL 662333 (N.D. Miss. March 9, 2006) is similar in that a woman’s husband died, after a car accident, in the early morning hours of January 1, 2002. It was undisputed that had Jeffrey Cummings died before midnight, the defendant would have been required to pay a $270,000 life insurance death benefit Mr. Cummings had obtained through his work at Cooper Tire. However, at midnight, the company’s insurance provider changed from the defendant to Unum Life Co. of America. Because Mr. Cummings was dead, his insurance rights were governed under the terminated employee section of the company’s plan, giving Ms. Cummings the right to convert the life insurance to Unum, but only up to $2,000.
The court first ruled that ERISA pre-empted Ms. Cummings’s state law claims, including punitive damages. (For non-lawyers and non-benefits specialists, in a nutshell ERISA is the federal law that provides an exclusive remedy for benefit plans maintained by employers, and bars state law claims. That’s about all I want to say about ERISA for a while.) The court then rejected Ms. Cummings’s claim that she was entitled to convert the life insurance to the new plan in the full amount, as if it had been done before Mr. Cummings died.

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