Complaint Review: American Memorial Life Insurance Company

This is a bait and switch Funeral pre-need policy.  The consumer is guaranteed "peace of mind" for their familiies in the event of exuberant funeral costs, but breaches the terms of its own contract by failing to timely conduct a medical investigation

The alleged "two year" contestability period as it reads in the policy is a conditional contestability period.  In other words it is contestable, if and only if the insurance company finds that upon receipt of first premium and for the previous years prior to that date, the insured was not diagnosed with a listed condition, If not, coverage is effective.

From the time the insured enters into the contract/enrollment form, a medical release of information is executed, so the insurance company has a duty to timely conduct its investigation as to whether or not the insured had been diagnosed with a listed illness for the previoius five years.

Moreover, the insured executes an affidavit confirming that he/she has not been diagnosed with any of the liste illnesses. 

But if the death occurs within the two year period, the insured and its agents misrepresents that coverage is contestable and denies the claim right then and there, after they are in possession of the decedents body and embalment has taken place.

Loophole # 1 - Next they move to wash their hands of any contractual obligation by offering to credit you the premiums for the upfront funeral costs that you have to pay for because they misrepresent to you that there is no coverage, or it is being contested, or denied.

Loophole # 2 - Next let's look at the listed conditions.  For example, Diabetes requiring more than 80 units, and Kidney Failure.  Well we all know that in the progression of the Diabetes illness, Kidney failure is inevitable.  So what the insurance company does is in their contestablity period they search and fine-tooth medical records post enrollment and are guaranteed absolution of their contractual obligations because of the natural progression of the listed diseases. 

* However, keep in mind that the medical investigation can only go to the previous five years from the time of enrollment and not after. 

So in a nutshell on paper/contrat you have coverage upon receipt of the the first premium by American Memorial Life Insurance Company, but in reality you don't.  Unless you pay for a minimum of two years, you don't have any coverage.  So for two years you are paying premiums but not recieving the coverage as stated in the policy.

The contract was executed in the Great State of Texas, and our contract laws are integrated with the Deceptive Trade Practices Act and the Texas Departement of Insurance heavily regulates insurance companies when they engage in unfair deceptive practices.  The state administrative penalties issued by TDI will most surely deter American Memorial Life Insurance Company from future deceptive acts. 

Suffice to say, that the contestability / denial of the covereage at the loss and devastation of a loved one in preparation of their last ceremony is an intentional infliction of emotional, mental, and physical distress, yet another tort action.

Stay out of our state, and keep your praire dog business practices in South Dakota. 

Don't mess with Texas!!!