Accidental Death Policy Exclusion Inapplicable in Beneficiary's Benefit Claim

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The beneficiary of an accidental death and dismemberment insurance policy is entitled to benefits because the insured's pre-existing condition did not substantially contribute to his death, the U.S. District Court for the District of South Carolina ruled July 12 (Genal v. Prudential Insurance Co. of America, D.S.C., No. 6:11-cv-00182-TMC, 7/12/12).

Prudential Insurance Company of American denied the beneficiary's claim for accidental death benefits after concluding the insured's death was caused by multiple sclerosis, which it said prevented the insured person from getting up after he fell.

Judge Timothy M. Cain determined that Prudential should not have denied the beneficiary's claim for accidental death benefits because the insured's death was caused by a fall that was brought on by prolonged heat exposure.

Benefits Denied After Insured's Death.

Gregory Genal purchased Employee Retirement Income Security Act-governed accidental death and dismemberment life insurance through Prudential. The policy provided coverage for accidental bodily injury when a loss “results directly from that injury and from no other cause” and excluded coverage for loss of life resulting from “Sickness whether the Loss results directly or indirectly from the Sickness.”

Gregory Genal was 74 years old when he died in May 2010. Prior to his death, he had suffered from MS for 25 years. He was found unresponsive in his back yard near a motorized scooter. Police and a medical examiner determined that Gregory Genal had fallen while pushing or dismounting the scooter. The medical examiner issued a report and listed the manner of death as “accident” and the cause of death as “Environmental Heat Exposure Complicating Multiple Sclerosis.”

Shawn Genal, Gregory's son and the beneficiary of the Prudential policy, filed a claim for $60,000 in benefits under the life insurance policy. Prudential denied the claim after concluding Gregory Genal's death “result[ed] directly from sickness (Multiple Sclerosis)” because it “prevented him from removing himself from the Environmental Heat Exposure.”

Additionally, Prudential relied on the opinion of Dr. Albert A. Kowalski, a certified medical review officer who also served as Prudential's vice president and medical director. Kowalski determined that Gregory Genal's death was caused by MS because he “was not able to get up or crawl into the house after the fall” to prevent his death from environmental heat exposure.

Prudential denied the son's benefit denial appeal and stated that Gregory Genal's death resulted “directly and/or indirectly from his multiple sclerosis.” The son sued, and the parties filed a joint stipulation permitting the court to review the benefit denial de novo to determine if Shawn Genal was entitled to benefits.

Decedent Covered Under Policy.

The court first addressed whether Gregory Genal's death was covered under the Prudential life insurance policy. The court, quoting Quesinberry v. Life Insurance Co. of North America, 987 F.2d 1017, 16 EBC 2625 (4th Cir. 1993), noted that “when policy language limits coverage to losses caused by accidents 'directly and independently of all other causes,' the existence of a preexisting condition which contributes to the loss does not bar recovery under an ERISA policy unless the preexisting condition 'substantially contributed to the disability or loss.' ”

Citing Adkins v. Reliance Standard Life Insurance Co., 917 F.2d 794 (4th Cir. 1990), the court noted that a two-part test requires it “to determine whether there is a pre-existing disease, pre-disposition, or susceptibility to injury and then whether it substantially contributed to the disability or loss,” which prevents policies from limiting coverage to extreme situations.

The court determined that the sickness exclusion in Prudential's life insurance policy applied only if Gregory Genal's “MS substantially contributed to his death.” Gregory Genal's death was “initially triggered by the fall from the scooter and not his illness,” the court said. The court noted that Gregory Genal would not have died “but for the fall” and “but for the heat exposure.” The court concluded that Gregory Genal's “MS did not substantially contribute to his death” and that “an overly strict interpretation of 'directly [from that injury] and from no other causes' would provide coverage only where the insured was in perfect health at the time of an accident.”

Sickness Exclusion Does Not Apply.

The court next addressed whether the policy's sickness exclusion applied. The court noted that the exclusion applied if Gregory Genal's death was “indirectly or directly the result of a sickness.” Prudential argued that Gregory Genal's MS caused his death because he was “unable to remove himself from the elements” after falling.

The court examined Kellogg v. Metropolitan Life Insurance Co., 549 F.3d 818, 45 EBC 2132 (10th Cir. 2008) (234 PBD, 12/8/08; 35 BPR 2754, 12/9/08), “where an insured suffered a seizure which caused a car accident.” The court said that, in Kellogg, the U.S. Court of Appeals for the Tenth Circuit “found that the insured's death was caused by a skull fracture resulting from a car accident, not by the seizure that caused the car accident” and noted that “courts have long rejected attempts to preclude recovery on the basis that the accident would not have happened but for the insured's illness.”

The court noted that no evidence existed that Gregory Genal's “fall triggered a flare-up in [his] MS or that his MS worsened in any way after the fall” and that his “death was a direct result of the fall occurring outside and causing him to be exposed to the heat, not his MS.” The court concluded that Gregory Genal's MS “should not be found to be substantially contributing to his death” and that Prudential's “exclusion does not apply.”

Shawn Genal was represented by Robert E. Hoskins of Foster & Foster, Greenville, S.C. Prudential was represented by Douglas W. MacKelcan of Carlock Copeland Semler & Stair, Charleston, S.C.

The full text of the opinion is at

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