Don’t Forget to Read the Fine Print, Burial Insurance

December 2, 2009
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imageDo you have burial insurance? Mr. Sims, a resident of Monroe, did. He bought it back in 1958. The policy cost one dollar and 38 cents per month. Mr. Sims paid on time, in full, for 20 years. The policy stated that after 20 years of payments, upon the death of Mr. Sims, funeral benefits would be provided, ?which shall include the following: casket and outside case, burial garments if requested, preparation of body, funeral coach, arrangement and transportation of flowers, conducting of funeral, furnishing information to newspapers, cemetery equipment, chairs, use of funeral home, acknowledgment cards, candelabra and a prayer bench when desired.?

Although Mr. Sims had paid the policy in full by 1978, he did not die until 2003. At that time, his wife went to the funeral home expecting that her husband?s funeral would be paid in full. Well, as you can imagine, a funeral back in 1958 (or 1978 for that matter) was significantly less expensive than a funeral is today. So the funeral home told Ms. Sims that she would have to pay an extra $5,000.

Ms. Sims was in shock. She wasn?t asking for anything fancy or for any upgrades: she just wanted the services provided in the insurance contract.

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Unfortunately, Ms. Sims did not realize that the burial insurance policy her husband bought all those years ago had something called a ?face amount.? And the small print in the contract said that the absolute maximum the insurance company would pay for Mr. Sims burial was the ?face amount.?

Care to guess how much the ?face amount? of the burial insurance? $500. And even though a casket, outside case, burial garments, etc. cost Ms. Sims $5,500 in 2003, the insurance company would only pay the $500 maximum. Ms. Sims was responsible for the $5,000 remainder.

She thought that this was very unfair as she and her deceased husband both thought that they were buying insurance that ?provided for a full funeral service at no additional cost.? So she sued. And the case went all the way to the Louisiana Supreme Court.

And lots of different organizations weighed in with the court. The Louisiana Attorney General filed a brief. So did the Louisiana Insurers Conference, the Louisiana Life and Health Insurance Guaranty Association, the Louisiana Funeral Directors Association as well as AARP.

In the end, not all of the Louisiana Supreme Court judges could agree. But a majority of them voted that Ms. Sims would only get $500 because the insurance policy, read in its entirety, was not ambiguous and ?could only lead to one reasonable interpretation? because it ?set forth in clear and unambiguous terms? that the face amount of the policy was only $500.

Bottom line: if you have burial insurance and you think it?s going to provide for a full funeral service at no additional cost, you better pull out your policy and read it again. If you qualify for help at Legal Services of North Louisiana, the law firm where I work, we will review your burial insurance policy for free. And I?m sure you?ve heard it before, but, please, don?t sign anything without reading it. And if you don?t understand it, don?t sign it. Have someone you trust, such as a family member, neighbor or lawyer review any papers that you don?t understand before you sign.

Writer: Lee Aronson is an attorney with Legal Services of North Louisiana. His practice areas include consumer law, housing law and health care law.

Source: The Best Of Times News

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