In Tate v. U.S. Financial Life Insurance Company, a widow brought an action against the insurer claiming that she was entitled to life insurance benefits under a policy for which her deceased husband had applied, alleging that the insurers breached the contract in bad faith. The United States District Court for the Western District of Pennsylvania stated that in Pennsylvania, if a decedent did not fulfill the requirement of remitting the first premium payment while there was no change in his health, the insurance policy does not go into effect, and the insurer has no contractual obligation to provide insurance coverage to decedent upon his death. In the instant case, the carrier offered decedent a policy of insurance, but the decedent did not accept the terms of the policy while he was still alive by signing the delivery documents and paying the premium. Accordingly, because there was no insurance policy in effect at the time of decedent’s death, the court held that Plaintiff could not establish a prima facie case under Pennsylvania’s bad faith statute.
Date of decision: September 1, 2006
Tate v. U.S. Fin. Life. Ins. Co., U.S. District Court for the Western District of Pennsylvania, No. 02:04cv0820, 2006 U.S. Dist. LEXIS 62603 (W.D. Pa. 2006) (McVerry, J.)