In this case, the estate of a deceased credit union member brought suit to recover life insurance proceeds against the credit union and its group life insurer (CUNA Mutual) that issued a certificate of insurance to the member.

Here, Mr. Hall applied for membership at HAPO Federal Credit Union. He completed the application, listing his occupation as “Retired” and his date of birth exceeding 70 years of age.

According to Mrs. Hall, the credit union personnel advised her husband that their membership included life insurance coverage on Mr. Hall to the extent of any amount on deposit at the credit union upon his demise.

Thereafter, the credit union supplied new member information to the Halls, which included a CUNA Mutual certificate of life insurance. The life insurance certificate was given to the member even though he was over 70 years old. The CUNA Mutual policies do not, however, provide insurance coverage for members over 70 years of age.

Mr. Hall died and his wife applied for the insurance benefits. The claim was denied by CUNA Mutual due to Mr. Hall’s age.

Mrs. Hall then caused suit to be filed against the credit union, since its employees allegedly represented that there was life insurance coverage, and against CUNA Mutual, since a certificate of insurance had been issued to the member.

The court found that there was no evidence the credit union acted in bad faith, even if representations had been made from credit union employees that there would be life insurance for Mr. Hall.

In addition, the court found that neither the Halls nor the credit union paid insurance premiums to CUNA Mutual. Hence, the court denied the claim for benefits filed by the member’s estate, and found no liability against either the credit union or CUNA Mutual Insurance Society.  Estate of Thomas Hall v. HAPO Federal Credit Union and CUNA Mutual Insurance Society (Court of Appeals of Washington, Case No. 12567-0-III).

Author: Charles R. Harroun, Attorney at Law