Termination of Benefits
McClure v. Country Life
Jim McClure purchased a disability insurance policy from Country Life in 1995 to provide a safety net for his family in the event he ever became disabled and unable to earn an income. Jim was in his early 40s when, in 2012, he suffered a traumatic brain injury and developed cognitive and speech impairments and crippling depression and anxiety. Unable to work, Jim filed a disability claim with his insurer, Country Life in January 2013, four months before he was hospitalized for suicidal ideation.
Country Life initially accepted the claim and began paying Jim the disability benefits it owed under Jim’s policy. But after paying benefits for a year, Country Life terminated the claim. It did so without gathering any treating physicians’ medical records during the previous eight or nine months. In its letter terminating benefits, Country Life said it had carefully reviewed extensive medical records and determined there was no evidence of any cognitive or mental health impairments.
Through treatment and sheer will, Jim had been slowly getting better. But after Country Life terminated his claim, his progress stalled and his mental and psychological health declined. Seven weeks after losing his disability benefits, Jim was hospitalized for suicidal ideation—for the 2nd time in under a year. Without his benefits and unable to work, Jim and his family eventually resorted to charity from their church and friends to get by.
Country Life refused to reverse its decision, so Jim filed a bad faith lawsuit alleging Country Life and its sister company (CC Services, Inc.) had terminated his disability claim without a reasonable basis. Ten months later, Country Life reinstated Jim’s claim. Maintaining that its original decision to terminate the claim was correct, however, Country Life refused to reinstate the claim to the date the claim was terminated. Instead, it reinstated the claim to the date Jim was hospitalized for suicidal ideation seven weeks after the termination.
Following a three-week trial, the jury found Country Life and CC Services had terminated Jim’s claim in bad faith. The jury awarded Jim over $6.5 million, including $5 million in punitive damages.
The litigation was difficult for Jim, who suffers disabling depression and anxiety. He persisted, however, to ensure others would not suffer as he, his wife, and two young daughters had at the hands of an insurer putting profit ahead of its insureds.