In the life insurance context — whether or not the policy has an accidental death and dismemberment (AD&D) rider — it is common for insurance companies to wrongfully deny a legitimate claim for benefits, or to otherwise interfere with the processing of a legitimate claim through an unreasonable delay. These actions can put serious pressure on the policyholder and/or their beneficiaries.

If your claim is denied, for example, you may be forced to appeal the denial through an internal administrative process, or, if that does not resolve the issue, to sue the insurer in a court of law. When grieving for a loved one, the prospect of an ongoing legal conflict may seem daunting.

At Berg Plummer Johnson & Raval, LLP, our attorneys are well-positioned to seek a favorable resolution to an insurance dispute, including those that involve life insurance claims and AD&D claims. We understand that having a life insurance or AD&D claim denied can be an overwhelming experience. After all, an unexpected claim denial can leave you and your family in a vulnerable financial position. We therefore work closely with our clients to ensure that they are fully aware of how their case is progressing.

Life Insurance as the Default Option

Life insurance is rather simple. Though there are numerous different ways in which life insurance policies can be structured — policies can vary substantially with regard to their benefits, exclusionary clauses, underlying investments, and qualifying requirements — as a general rule, a life insurance policy pays out a lump-sum death benefit to the specified beneficiaries if the policyholder dies.

Life insurance policies will pay out no matter how the death was caused. As such, they provide very broad coverage in the event of death. Some exclusions may apply, however (section 1101.055 of the Texas Insurance Code details the permissible exclusions), so it’s important to have a qualified attorney review your policy.

For example, a life insurance policy may have an exclusion that gives the insurer the right to deny benefits to the beneficiaries if, following a reasonable investigation, the insurer determines that the policyholder committed suicide.

Standard life insurance policies form a critical component of most long-term financial plans for couples and families. On the other hand, more specific sub-categories of life insurance, like AD&D coverage, are less common.

What is an AD&D Insurance Policy?

AD&D insurance coverage covers serious injuries — both fatal and non-fatal — that are suffered by the policyholder pursuant to an accident. As such, AD&D coverage is somewhat broader and more limited than standard life insurance coverage, which only pays out a benefit in the event of death (no benefit paid out for non-fatal injuries in a life insurance policy), but which pays out benefits regardless of whether or not the death occurs in an accident scenario.

For example, suppose that you have purchased AD&D insurance coverage. One night, you are injured in a car accident and lose both your legs in the accident. Depending on the language of your AD&D policy, you may be entitled to a substantial benefit payout.

Now, imagine a different scenario. Instead, you lost your legs to a rare illness that you developed due to a genetic mutation. Because your injury/disability was not caused by an accident, you would not be entitled to benefits under the AD&D insurance policy.

AD&D insurance policies can be purchased in two different forms: 1) as an optional rider to an existing life insurance policy, or 2) as a standalone, independent insurance product. When AD&D insurance is purchased as a rider to an existing life insurance policy, the AD&D benefits will generally pay out a proportion of the death benefit in the event of an accident.

For example, if you are severely injured in an accident, then, depending on the nature and extent of the injury (as defined by the terms of the AD&D rider), you might be entitled to anywhere between 50-100 percent of the total death benefit.

If you are killed in an accident, the AD&D benefit will tack-on to the life insurance policy’s standard death benefit. This is known as “double indemnity,” and can lead to a substantial bonus payout for the beneficiaries.

Unique Challenges in the AD&D Insurance Context

AD&D insurance coverage is often poorly understood by policyholders, who are initially drawn to such coverage due to its low premiums (and the promise of substantial benefit payouts). In reality, there are a number of limitations that can make it challenging for a beneficiary or policyholder to secure the full benefits they are entitled to under the AD&D insurance policy at issue.

AD&D insurance policies only cover accidents. Death or injuries caused by illnesses (and various other non-accidental causes) are not eligible for benefits. This fundamental distinction forms the core of many disputes between policyholders, beneficiaries, and AD&D insurance companies.


Often, the circumstances surrounding a severe accident are unclear. The policyholder may have suffered from a variety of pre-existing conditions. In the AD&D insurance context, insurers routinely base their denials on this lack of clarity with regard to the cause of the injuries or death at issue.

For example, suppose that you are involved in a motor vehicle accident where you suffer severe injuries to your back, neck, and spine.  Months later, your injuries lead to paralysis in your lower limbs. At this point, your claim for benefits may seem perfectly legitimate, but insurers will latch onto any confusing factors that could be used to justify a claim denial.

The insurer will conduct a thorough investigation of the facts, which will likely include your medical history. Now, suppose the insurer discovers that you were suffering from a degenerative spinal issue at the time of the accident. This may lead the insurer to argue that the paralysis of your limbs was caused by the natural progression of your degenerative illness, and not by the motor vehicle accident.

AD&D insurance policies are famously riddled with exceptions that can lead to a denial. These exceptions include, but are not limited, to:

  • Abuse of illegal substances
  • Though an accident did occur, it is not a “covered” accident pursuant to the language of the AD&D policy
  • The AD&D policy was not active at the time of the accident
  • The accidental death/disability was caused by an illness or a pre-existing condition
  • Post-accident medical treatment led to the death/disability
  • And more

Available Benefits Under the Policy May Change Dynamically

In AD&D insurance policies, the benefits are paid out as a proportion of the total coverage amount purchased at the time of enrollment. The percentage benefit that will be paid out (of the total coverage amount) depends on the nature of the loss, as well as other circumstantial factors.

For example, an AD&D insurance policy may only pay out 50 percent of the benefit for the loss of use of a single limb. By contrast, the policy may pay out 100 percent of the benefit for loss of sight or loss of hearing.

Every policy is different, and some are much stricter than others. Generally, the presence of certain factors may result in a larger benefits payout. These factors often include, but are not limited, to:

  • Use of a seatbelt
  • Accident occurred and the airbag released properly
  • Undergoing rehabilitation training in the wake of an accident
  • If the policyholder has a spouse and children, additional education benefits may be paid out
  • Comatose period
  • Criminal violence led to the death/disability
  • And more

Texas Incontestability Law

In Texas, as in many other states, life insurance companies have a limited time during which they have the right to contest life insurance claims. Texas law gives insurers two years from the date the policy goes into effect. This period is known as the “contestability” period.

What happens during the contestability period?

During this time, the insurer will be allowed to investigate your original application (in addition to your lifetime medical history) and determine whether you misrepresented any of the information on your life insurance application.

If the insurer discovers that the application contains a mistake, or that you misrepresented some information in your application, then it will further investigate the situation to determine if the mistake/misrepresentation is relevant to the life insurance claim at-issue. If the life insurance claim would be affected, then it may deny the claim or reduce the death benefit. If only the premiums would have been affected, then the insurer may reduce the death benefit to account for the higher premiums.

After the contestability period passes, you need not worry about any mistakes or misrepresentations on the application. At that point, Texas law precludes the insurer from disputing coverage. Moreover, a mere mistake may not be enough to reduce or cancel coverage, as the insurer might have to prove fraud or intent.

Challenging the Claim Denial

The particular procedures required to challenge a claim denial vary depending on the type of life insurance and AD&D insurance policy that you have. If your life insurance or AD&D insurance is funded by your employer, you may have to adhere to the complicated administrative appeal procedures demanded by the federal Employee Retirement Insurance Security Act (ERISA). If you have an individual policy or a policy that is exempt from ERISA, then Texas state law will apply. This demands an entirely different set of procedures.

Here at Berg Plummer Johnson & Raval, LLP, our attorneys have experience litigating insurance disputes in accordance with both Texas state law and federal ERISA regulations.

Depending on your insurance policy, you may have you pursue an administrative appeal with your insurer before you can file a lawsuit. With the aid of an experienced insurance attorney, you can pursue an administrative appeal with the insurer. If that fails, and negotiations fall through, then a lawsuit may be the most effective way to recover the benefits and other damages that you are owed.

About Berg Plummer Johnson & Raval, LLP

Our Houston insurance attorneys have decades of experience representing clients in a range of insurance disputes, including those that involve comprehensive life insurance policies with AD&D riders, or separate AD&D insurance policies where the insurer is refusing to pay out after an accident.

We believe that effective representation demands a client-oriented mentality. From the very beginning of the attorney-client engagement process, we treat our clients as valuable collaborators, notifying them of new developments as litigation progresses, and consulting them to ensure that we are on the “same page,” strategically speaking. We understand that every client has different budget limitations, so we offer customized fee solutions that are designed to give clients an opportunity to accomplish their goals in litigation while avoiding unnecessary budget spillovers.

This “client-first” approach has led to a number of successes over the years. We have a long and consistent track record, helping secure substantial benefits on behalf of policyholders and insurance beneficiaries. 

Call us at (713) 526-0200 or contact us online to schedule a consultation.

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