Why You Should Read Your Policy Carefully: A Case Study
In prior posts, we’ve discussed the importance of thinking through the pros and cons of replacing an older policy with a newer one. We’ve also cautioned against blindly relying on agents when selecting a policy, without taking the time to read through what you are purchasing yourself.
The recent case of Mathis v. MetLife[1] illustrates why this is so important. Dr. Mathis, an orthopedic surgeon, had a Standard policy that he decided to replace in order to protect his increased income and earning ability. At the suggestion of his insurance broker, Dr. Mathis purchased a MetLife policy to replace the Standard policy. While the benefit amount of this new policy was higher and the MetLife policy was marketed as an “own-occupation” policy, it had additional terms that limited Dr. Mathis’s ability to work in a different capacity and collect disability benefits, if he could no longer be a surgeon.
Over ten years after purchasing this MetLife policy, Dr. Mathis became disabled and was no longer able to practice as an orthopedic surgeon. Believing that he had a policy that allowed him to collect benefits as long as he couldn’t do his prior occupation (and under the assumption that it didn’t matter if he was employed in a different profession), he took a job at an orthopedic device manufacturer.
Upon learning of this new job, MetLife informed Dr. Mathis that, in addition to being unable to perform the material and substantial duties of his regular occupation (orthopedic surgeon) he also had to demonstrate he was “not gainfully employed” in order to qualify for total disability benefits.
At that point, Dr. Mathis could not undo the decision to start the new job, so Dr. Mathis and his lawyer sued MetLife, the brokerage firm, and his insurance broker for breach of contract, alleging that they were negligent in becoming familiar with the MetLife policy and negligently failed to insure him for total disability within his occupation (without the need to be gainfully employed), which was the coverage he thought he was getting. In response, the defendants argued that Dr. Mathis had had the policy for over ten years, and that he had a duty to read the policy when he first received it.
To date, the dispute is still ongoing and has not been fully resolved by the courts. However, so far, Dr. Mathis has had to deal with the additional initial headache of arguing over which state law applies to the dispute, since Dr. Mathis had been living and practicing in Alabama when he bought the policy (but now lives in Massachusetts), MetLife is headquartered in New York, and the broker’s company is headquartered in Indiana. It remains to be seen whether Dr. Mathis ultimately prevails, but at the very least, he would have saved significant expense and stress if he had simply read the terms of the MetLife policy carefully before paying years of premiums for coverage that he did not want.
Every claim is unique and the discussion above is only a limited summary of the court’s ruling in this case. If your policy’s terms are not what you expected, an experienced disability insurance attorney can help you assess the situation and determine what options, if any, are available.
[1] Mathis v. MetLife, No. 1:18-cv-01893-JRS-DLP, 2019 WL 1409464 (S.D. Ind. March 28, 2019).
