In a post I had written a year or so ago I had related the story of a client who was fighting with hospitals and her fiance’s family for a life insurance death benefit that was rightfully hers. They were a proactive couple, wanting all of the pieces in place by the time they got married, and in fact there were compelling reasons that they wanted it in place sooner.

They had life insurance on each other, but the primary goal of his insurance with her as beneficiary was so she could take care of his grandfather, keeping him in his own home, a plan that none of the rest of the family wanted to participate in. So we put the life insurance in force and just about a year later he died of a heart attack.

I honestly had not foreseen any issues in this (lesson learned here) and we started the claim process. Since the policy was still in the 2 year contestability period the company required a signed authorization to release medical information. She signed it as fiancee and beneficiary and things were moving along until a hospital refused to release records because she didn’t have any legal standing to sign the authorization. She was not his wife and according to them being a fiancee, domestic partner or friend doesn’t cut it these days for getting records released.

She then turned to her fiance’s mother to get the release signed and she refused because she was mad that her son hadn’t left money to her. This whole thing got uglier and uglier and ended up in court where after six months and a boatload of attorney’s fees, she was finally able to get a power of attorney to get the records released and the death benefit paid.

So, when I say lesson learned, the process now goes a little differently when there isn’t a clear legal relationship between the insured and the beneficiary. At the time we start the life insurance application process I now instruct the parties to see an attorney and get a medical power of attorney in place that will allow for signing an authorization to release medical information.

Bottom line. HIPAA laws were put in place to protect privacy of medical information. Things like the scenario I just wrote about wouldn’t have been an issue 10 years ago, but a big heads up to people who are engaged, couples who are “domestic partners” who, either because they don’t see a need to, or in the case of gay couples, may not be able to legally marry, get the power of attorney. There are no laws against it and it can save plenty of heartache and hassles.

If you have any questions about this post or need help in applying for life insurance, I am a licensed agent in all 50 states and can be reached directly at 866-539-7914 or ed@hinermangroup.com.

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