Principal Wrongly Interpreted its Disability Policy in Denying Benefits to Louisiana Attorney with Neurosarcoidosis
A Lafayette, Louisiana Court found that Principal Life Insurance Company (“Principal”) misinterpreted its long-term disability (“LTD”) policy when it denied Miranda Tait’s claim for benefits.
Ms. Tait was working as an Advocacy Center attorney in 2018 when she was diagnosed with neurosarcoidosis, a life-threatening neurodegenerative disease. Throughout 2018, Ms. Tait’s condition worsened and resulted in vision and cognitive impairments, hearing loss, headaches, speech problems, mood swings, anxiety, depression, memory loss, and dementia. On her last day of work, December 31, 2018, Ms. Tait was in utter misery from her disability and worked from home on her couch and in bed.
The LTD Claim
One month later, Ms. Tait filed a claim for LTD benefits with Principal. Ms. Tait reported that at some point after work on December 31, 2018, but before midnight, she became literally bedridden and could no longer work due to her disability. Principal, however, denied the claim on the basis that Ms. Tait did not become disabled until after her coverage terminated. Principal took this position because Ms. Tait’s employer obtained a new LTD policy with MONY Life Insurance to replace Principal’s LTD policy, with an effective date of January 1, 2019.
The Lawsuit & Court’s Decision
Ms. Tait filed a lawsuit against Principal in Louisiana federal court seeking payment of her LTD benefits. In response, Principal filed a Motion to Dismiss and argued that because Ms. Tait was able to perform her regular job duties on the last day Principal’s policy was in effect, her disability did not begin until after the policy expired.
In denying Principal’s Motion to Dismiss, the Court explained that:
- The plain language of Principal’s policy provides that Ms. Tait’s LTD coverage did not terminate until midnight on December 31, 2018;
- Ms. Tait reported that she became disabled prior to midnight on that date; and
- Principal had not shown that its policy terminated at the moment Ms. Tait finished work on December 31, 2018, sometime prior to midnight.
The Court’s decision illustrates how important and necessary it is to understand (and correctly interpret) the terms and contractual language in a disability insurance policy.
Lawyers Specializing in Disability Insurance Claims
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