Insurance Companies Deny Celebrities, Too

Insurance Companies Deny Celebrities, Too

By Steven Muller LL.B, J.D, LL.M.

Vice-President, Share Lawyers

What do Heath Ledger and Britney Spears have in common? Their life and disability insurance companies delayed payment of legitimate claims worth millions of dollars. Competent specialised lawyers were retained to fight their entitlements.

ReliaStar Life Insurance Company, owned by ING America, refused to pay Heath Ledger’s death benefit of $10 million dollars to his 3-year-old daughter, Matilda Rose. The 28-year-old star of Brokeback Mountain and The Dark Knight is now the winner of the Golden Globe and Oscar posthumously. Ledger was found dead in his New York apartment in January 2008 some seven months after taking out the policy where his daughter Matilda is the beneficiary. The New York medical examiner ruled an accidental prescription drug overdose of painkillers and other medicine: alprazolam, diazepam, doxylamine, hydocodone, oxycodene and temazepam. Despite the ruling, ReliaStar suggested Ledger committed suicide or lied on his insurance application when he said he never used illegal drugs showing bad faith in applying to the policy. ReliaStar refused to pay, claiming the policy was voided.

Prior to approving the application, Reliastar didn’t ask for Ledger’s physicians’ records. Post claim, the insurance company asked for names of doctors, psychiatrists and all kinds of other records. The estate hired a lawyer on behalf of Matilda and sued ReliaStar claiming punitive damages and contending that the insurer acted in bad faith in its refusal to pay the Ledger policy. ReliaStar in January 2009 agreed to a confidential settlement rumoured to be around $10 million. The insurer appears to have attempted to engage in post-claims underwriting in order to delay payment to Matilda.

Britney Spears hasn’t been as fortunate with her insurance dispute. In 2005, Spears sued eight international insurance companies including Liberty, AXA and QBE to recover $9.8 million in damages for their refusal to pay her for losses she sustained when her European concert tour in 2004 was cancelled because of a knee injury. Spears paid more than $1.3 million in insurance premiums on contingency insurance, a form of accident and illness insurance for celebrities, to cover abandonment, postponement and cancellation of performances for her 2004 Onyx Hotel Tour through the United States, Canada and Europe.

Spears underwent a medical examination for her insurers on February 5, 2004 and Dr. Drazin concluded that she was “in sound health and free from disease” and “in fit condition” for the Tour. Unfortunately for Spears, she failed to note on the questionnaire that five years earlier she had an orthopaedic surgery on her left knee and had fully recovered, subsequently performing hundreds of times since the surgery. In March 2004 Spears injured her left knee during a performance and cancelled two shows. Spears was examined by the insurer’s doctor and cleared to perform further shows. In April 2004 Spears provided an explanation at the request of the insurers for the omission in the 2004 questionnaire. After April 2004 the insurers extended the policy from August 10, 2004 to August 15, 2004 and accepted premiums despite Spears acknowledging that she made a mistake on the 2004 questionnaire. On June 11, 2004 Spears had surgery for her injury that took place on June 8, 2004 while shooting her music video “Outrageous”. Ultimately Spears was diagnosed with a floating cartilage and cancelled her summer tour of 2004. Despite Spears’ insistence that many of the insurers knew of her pre-existing problems because they insured her for the Tour 2000 with disclosure at that time, Spears’ insurers are dragging their feet in paying this legitimate claim.

Whether you’re a celebrity or not, being denied your claim is stressful for you and your family. Insurers delay as a matter of course. Able counsel may reduce the delay and help resolve your life insurance claim and disability insurance claim.

Has your disability insurance claim been denied? Contact Share Lawyers and put our experience to work for you.

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