John Doe v. Life Insurance Company of North America

The Employee Retirement Income Security Act of 1974 allows participants of qualified plans to sue in federal court for benefits due to them under the plans. Here, John Doe used to be employed by Excite, and while there he participated in a life insurance plan managed by LINA which would pay him up to $180,000 on his death. Excite paid the premiums (probably as a percentage of payroll) while John worked.

Sometimes sad things happen in NDCal. In June 1996, John developed AIDS and eight months later he went on disability leave and filed a claim with LINA for disability benefits. In March 1999, Excite terminated John. This gives rise to the current dispute.

According to the terms of the policy, John could keep the life insurance upon termination if he paid the premiums, but if he was 1) gave proof of his disability 2) was disabled for nine months 3) provided annual proof of his disability and 4) became disabled before age 60 he would not have to pay the premiums.

LINA argues that John needed to make a claim for a waiver of his premiums within 30 days of becoming disabled, but he would not be eligible for a waiver until nine months after going on disability. As Magistrate Laurel Beeler explains:

It does not make sense that an insured claiming a premium waiver gives notice in 30 days, submits proof...in 90 days, becomes eligible in nine months and submits proof again in twelve months.

The magistrate found that either Excite's request to pay the disability benefits or John's own request provided adequate notice to pay the benefits.