Utah Court of Appeals
Can an insurance company waive medical requirements by accepting premium payments? Bear v. LifeMap Assurance Co. Explained
Summary
Bear applied for increased life insurance coverage for her husband during open enrollment but failed to submit required evidence of insurability (EOI). Due to a software error, the school district deducted increased premiums from her paycheck for several months. When her husband died, LifeMap denied the claim for increased benefits, having never received the required EOI.
Analysis
In Bear v. LifeMap Assurance Co., the Utah Court of Appeals addressed whether an insurance company waived its right to require evidence of insurability (EOI) when it unknowingly received premium payments for coverage it never approved.
Background and Facts
Tomi Bear, a school district employee, applied for increased life insurance coverage for herself and her husband during open enrollment. The policy required EOI for coverage increases, and a pop-up message clearly stated this requirement. Bear failed to submit the required medical information. Due to a software glitch, the district erroneously deducted increased premiums from Bear’s paycheck for several months and forwarded them to LifeMap. When Bear’s husband died, LifeMap denied her claim for the increased benefit amount, asserting it never received the required EOI.
Key Legal Issues
The primary issues were whether LifeMap waived the EOI requirement by accepting premium payments and whether the group policy created ambiguity regarding when EOI was required. Bear argued that LifeMap’s acceptance of increased premiums constituted waiver of the medical requirements.
Court’s Analysis and Holding
The court rejected Bear’s waiver argument, emphasizing that waiver requires “the intentional relinquishment of a known right.” LifeMap had no knowledge it was receiving increased premiums for Bear’s husband or that Bear had applied for increased coverage. Without such knowledge, LifeMap could not have intentionally waived its contractual right to review EOI. The court also found no ambiguity in the policy language, noting that contract headings are organizational tools rather than substantive provisions.
Practice Implications
This decision reinforces that insurance companies cannot waive policy requirements through inadvertent conduct. Practitioners should ensure clients satisfy all conditions precedent in insurance policies and recognize that mere acceptance of premiums, without knowledge of the underlying circumstances, will not establish waiver. The ruling also demonstrates courts’ reluctance to find implied waiver absent clear evidence of intentional relinquishment.
Case Details
Case Name
Bear v. LifeMap Assurance Co.
Citation
2021 UT App 129
Court
Utah Court of Appeals
Case Number
No. 20200183-CA
Date Decided
November 18, 2021
Outcome
Affirmed
Holding
An insurance company did not waive the requirement for evidence of insurability merely by receiving premium payments through a third party when it had no knowledge of the specific application or premium increases.
Standard of Review
Correctness for summary judgment rulings generally; some deference for waiver determinations on summary judgment
Practice Tip
When challenging insurance claim denials, ensure all contractual prerequisites were satisfied or that there is clear evidence of waiver through conduct demonstrating intentional relinquishment of known rights.
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