What is a Life Waiver of Premium benefit?

A "Life Waiver of Premium" benefit - also called an "LWOP" benefit- is a provision that is commonly included in life insurance policies which waives the premiums normally required to maintain life insurance coverage for insureds who are disabled.

This benefit is extremely important to a disabled person because often based on her medical history, she will be unable to obtain life insurance coverage elsewhere in the free market. She also may not be able to return to work and obtain group term life insurance coverage through an employer.

Each life insurance policy that has an LWOP benefit will define "disabled". The insured needs to meet this definition to qualify to have her life insurance premiums waived. Usually the standard for being disabled is very high - for example, being unable to work in any job for any wages.

If you make a claim for LWOP benefits and the claim is denied, or if you were receiving an LWOP benefit and your benefit is terminated, if your claim is governed by ERISA you have the right to appeal that decision. Even if your claim is not governed by ERISA, your life insurance contract may allow you to appeal that decision to the insurer. You may want to hire an attorney to help with that appeal.

Contact the Law Office of Katherine L. MacKinnon for more information!

FAQ: When should I get an attorney involved in my disability/life insurance/pension issue?

                There are three common times when you should think about involving an attorney in your ERISA employee benefits dispute or claim: (1) when submitting an application for benefits, (2) after the denial of benefits, and (3) at the commencement of litigation. Here is why you might choose to retain an attorney at any one of these times.

                You might decide to hire an attorney to submit your application or claim for benefits. This is a good strategy if you have a complicated situation or issue that may affect your application. One example might be if you are applying for long-term disability benefits after being terminated from employment or quitting from your job. Another example might be if your disabling condition is complicated your application for disability benefits may require some explanation as to why you can no longer perform you job. Applications are time consuming and complicated, so sometimes people hire an attorney to handle the application because he or she does not have the time or energy to devote to making sure the insurer receives all the information necessary. As long as your benefit plan is governed by ERISA, you will be allowed a chance to appeal any decision made by the plan administrator that is adverse to you, so many claimants choose to apply for benefits on their own and then hire an attorney only if they are denied.

                The most common time individuals hire an attorney is after he or she has had a pension, life insurance, or disability benefit denied. The attorney can then submit an administrative appeal for the claimant. An administrative appeal is a written appeal to the plan administrator explaining why the decision to deny benefits was wrong, and submitting any new evidence in support of the claim. An administrative appeal is VERY important, because once it is submitted you are frequently no longer allowed to submit any new evidence to support your claim to the insurer. Generally, it is best to consult an attorney when submitting your administrative appeal, so you can be sure the evidence in the administrative record (everything submitted to the plan administrator by you, and everything the plan administrator gathers or creates on its own in regards to your claim) is as complete as possible so the insurer can make a full and fair review of your claim for benefits.

                Once you have completed all your administrative appeals, the only option to pursue your case further is usually to bring a lawsuit in federal court. At this phase, you should almost always hire an attorney to represent you in your case. ERISA cases have complex legal issues like how much deference should be given to the insurer’s decision. It is best to have good legal representation once litigation begins.

Administrative Appeal Exhaustion

If the insurer makes an "adverse benefits determination" (meaning a decision that is in some way not favorable to you - such as terminating or denying your benefits claim), ERISA regulations require that you be allowed to submit an administrative appeal to the insurer. The administrative appeal must be submitted to the insurer within a time frame that is determined by the type of benefit for which you are making a claim, and should include all information you can gather in support of your claim. The administrative appeal is VERY important because once the insurer has received you appeal, there is no other chance to submit any new information. The insurer will decide whether to stand by or reverse its original decision based on what you have submitted. If the insurer decides to stand by its original decision to deny or terminate your benefits, your only recourse is usually to bring a case in federal court.


Sometimes people ask us why they should bother with submitting the administrative appeal. Maybe you are sure the insurer will deny the appeal anyway. Or maybe you are in a hurry - administrative appeals take time and money to prepare, and you may end having to bring a lawsuit in the end anyway. Why not bypass all that hassle and go right to court?


The answer is that ERISA requires you to do all required administrative appeals before bringing a lawsuit. If you initiate a lawsuit before completing the administrative appeals, your lawsuit will be dismissed without being heard. While there are a few exceptions to this rule, generally you must submit all required administrative appeal process before going to court.


If you have questions about administrative appeals, you can contact us at the Law Office of Katherine L. MacKinnon for a consultation on your case.

Interested in Converting? Tread Quickly and Carefully!

If you are leaving work for a health related reason - for example medical leave for treatment of an illness, short or long term disability, or other medical reason - it may be imperative to find out about whether you can take your life insurance policy with you when you go! 

Usually, if you have life insurance through a group policy at work, when you leave employment you have a right to convert that insurance into an individual policy. This right is guaranteed in the majority of states (see a list of some, but not all, states statutes at the end of this blog post for examples.)

When you purchase a life insurance policy, you are usually required to answer questions about your current and past health conditions, and maybe submit to some type of medical exam. This is so the insurer can decide how big of a risk you are,whether they even want to give you a policy, and how much they want to charge you in premiums. Their investigation of your health is called medical underwriting. 

However, when you convert your group policy from work, you do not have to undergo any medical underwriting. You are guaranteed the right to continue your policy, although it will likely be for a higher premium than you were previously paying.

If you are leaving your job for a health related reason, it may be difficult for you to obtain life insurance again because of your medical history. It is therefore very important to find out the costs of and process for converting your group policy to an individual policy. In some states depending on the insurance policy's language, an insurer may not be required to notify you. So it may be the responsibility of the employee to find out whether they can convert their life insurance, and how to do it.  

The moral of the story is: be proactive and find out the price and procedure for converting your life insurance policy. Be especially sure to find out the time limit to submit any required premiums and paperwork, since most policies have a very short time frame in which to complete the conversion process. Request the paperwork, even if you are unsure whether or not you want to go through with the conversion, so you have everything you need in case you do decide to convert.

(State statutes regarding life insurance conversion from a group policy into an individual policy: Arkansas, Ark. Code Ann. §23-83-122; California, Cal. Ins. Code §10209(b); Delaware, 18 De. Code Ann. Tit. 18 §3125; Georgia, O.C.G.A. §33-27-5; Illinois, 215 Ill. Comp. Stat. Ann. 5/231.1(h); Massachusetts, Mass. Gen. Laws ch. 175 §134A; Minnesota, 61A.09, subd. 1(h); New Jersey, N.J. Stat. Ann. §17B:27-73; New York, N.Y. Ins. Law §4216(d); Pennsylvania, 40 Pa. Cons. Stat. Ann. §532.7; Tennessee, Tenn. Code Ann. §56-7-2305(c).)