When Jenny and John Crowley learned they were having a baby, they did the responsible thing: they bought life insurance.
Barely in their 30s, they passed the insurance company’s physicals, applied for a $500,000 policy for Jenny and a $1 million policy for John, and thought they wouldn’t have to worry about it for decades.
The Savings Bank Life Insurance Co. of Massachusetts was so taken with the Crowleys, the company used a photograph of their newborn daughter swaddled in a yellow blanket on the cover of one of its brochures.
Just one year later, Jenny was dead of an aggressive form of breast cancer, and when John tried to start his life anew as a single father, SBLI rejected his claim for it to pay his wife’s policy. The company claimed that even though doctors said Jenny was healthy, she must have been sick before they agreed to insure her.
“I took solace in the fact that I had this life insurance policy that was designed to protect me financially. Without that, it put a lot of stress on me,” John Crowley said. “Financially, I was thinking about how am I going to care for my daughter, how am I going to be a mom and a dad? It’s a very rough and kind of scary situation.”
Now Crowley is pushing for a change in Massachusetts law that would force an insurer to prove a person misrepresented his well-being or should have known he was not in good health based on “active symptoms of a serious change in health” in order to deny a claim. Under current standards, the responsibility rests with the insured person to prove he didn’t know he was ill.
SBLI, which has since settled with Crowley, acknowledges that it changed its own policy several months ago and is now supporting Crowley in his fight for the legislation, dubbed “Jenny’s Law.”
“Under precedent at the time, it did require that a person be in good health when the policy was issued, even if they didn’t know about it,” said general counsel Terence O’Malley. “We reviewed all that and agreed that a different standard should apply.”
In most states, “good health” is clearly defined in insurance laws, but in Massachusetts the courts have relied on precedent set in cases dating back to 1920 that put the burden on policyholders to demonstrate that they were in good health when the policies were issued.
Under the proposed law, which is expected to come up for a vote this spring, there is a presumption that the policyholder was in good health — otherwise, the insurer would not have issued a policy.
In Jenny Crowley’s case, SBLI cited the “good health” provision, which says the person insured must be in good health when a policy is issued, and the “incontestability” provision, which says that for a certain period after a policy is issued, usually two years, an insurer can rescind a policy or refuse to pay a claim.
Both are standard in life insurance policies, and insurers generally closely scrutinize claims made within the two-year period, said Edward Graves, a professor of insurance at The American College, a financial services college based in Bryn Mawr, Pa.
State Sen. Karen Spilka, who introduced the proposed change to the law, said the provisions are meant to prevent fraud and should not be invoked in cases like Jenny Crowley’s.
“When somebody is going through grieving the loss of a spouse, particularly someone so young, to have to think that you’ve taken all the steps that you’re told to be taking, to then find out that well, because of this possible technicality, that you may not get what you thought you were getting is just not fair,” she said.
Several state and national insurance associations said it was difficult to estimate how often a case like the Crowleys’ could occur.
In July 2004, Jenny Crowley passed a medical exam and blood work done by SBLI.
A month later, her doctor examined her breasts during a postpartum checkup and no abnormalities were noted. Two months later, a doctor noted some breast firmness and suggested that Jenny see a specialist as a precaution. A biopsy showed that she had stage IV breast cancer.
Jenny and John had known each other since elementary school, and were high school sweethearts. John proposed at the top of the Arc de Triomphe in Paris in 1999, and they were married a year later.
John went to work for an accounting firm, while Jenny was an account manager at an advertising agency. In 2002, they bought a house in Ashland, about 25 miles west of Boston. The following year, they were overjoyed when they learned Jenny was pregnant.
They chose SBLI because their rates were competitive, and Jenny had managed the company’s advertising. After Kaitlyn was born, SBLI asked if they could use her photo on their marketing brochure.
“If only every decision were as easy as choosing the right life insurance,” reads the brochure’s headline.
Some in the insurance industry were initially concerned that the proposed legislation would preclude companies from denying claims when they suspect fraud. But the industry now supports the measure.
“We believe the bill strikes a reasonable balance, enabling consumers to challenge claims decisions while preserving insurers’ ability to protect against fraud and misrepresentation,” said Andrew Calamare, president of the Life Insurance Association of Massachusetts.
John Crowley, now 34, testified before the state legislature about the proposed law.
“I feel like I have a moral obligation to prevent this from happening to anyone else,” he said.
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