The US 8th Circuit Court of Appeals ruled that UNUM Life Insurance Company of America acted reasonably in denying Sarah Phillips-Foster’s claims for benefits from her husband Mark’s policy, BNA reported. The appeals court upheld a ruling by a lower federal court.
Police reports indicated that Mark Foster was involved in a cult and that he had conspired with one of his cult “students” to kill him so Foster’s soul would “transfer into the student’s body,” the ruling said.
The police also determined that Foster’s wife could not be ruled out as a suspect in the murder conspiracy.
According to the BNA, the court also cited the fact that:
- two weeks prior to his death, Foster had taken out a new life insurance policy and drafted a new will
- Foster had written his own obituary and made a “goodbye” videotape for his family in the days prior to his death.
$400,000 in Total Coverage
According to court papers, Foster was covered under a group life insurance plan from UNUM provided as part of his employment as a Drug Emporium pharmacist.
The plan provided a $100,000 basic life benefit. Foster purchased additional coverage in the amount of $100,000. The plan also provided accidental death and dismemberment insurance coverage in the amount of $200,000. The plan included a suicide exclusion that applied to all but the $100,000 basic life insurance.
According to the BNA story, Foster’s body was found on the side of a road in July 1997 with a gunshot wound to his chest.
Based on the police investigation, UNUM denied coverage under the policy’s suicide exclusion for the $100,000 additional life insurance and the $200,000 accidental death and dismemberment insurance, and withheld payment of the $100,000 in basic life insurance to Phillips-Foster, the BNA report said.
Phillips-Foster sued under ERISA, challenging UNUM’s denial of benefits. A Minnesota federal judge upheld the insurer’s decision in October 2001.
In agreeing with the lower court, appeals judges rejected Phillips-Foster’s arguments including one that UNUM took too long to make its benefits determination.
The case is Phillips-Foster v. UNUM Life Insurance Co. of America, 8th Cir., No. 01-3570, 9/4/02.