Lie on Application for Life Insurance Voids Coverage


Rescission Available for Misrepresentation of Material Facts

Insurance requires that neither party to the contract of insurance do anything to deprive the other of the rights of either to the benefits of the policy. Each must, therefore, treat the other with the utmost good faith. In Edith Darby v. Primerica Life Insurance Company And Ashton Lucian King, Civil Action No. 20-1723 Section “R” (1), United States District Court Eastern District Of Louisiana (May 4, 2021) the insurer moved for summary judgment because the insured and the decedent lied in the application for life insurance.


On February 4, 2019, Darby, as policy owner, and her son, Wilbert Bias, as insured, applied for life insurance with Primerica. In completing the application, Bias answered “no” to the following two questions: “[w]ithin the past 10 years has any person named in this application been treated for or diagnosed by a member of the medical profession with: . . . [a] mental or nervous disorder?  [w]ithin the past 10 years, has any person named in this application: . . . used illegal or illegally obtained drugs (including prescription drugs) or been convicted of drug or alcohol related charges?

Both Bias and Darby signed the policy application below the following in bold-face type: “The approval of insurance for the proposed insured(s) is based on the representations made regarding the use of tobacco or nicotine, responses to medical questions and other application information. False representations will result in a denial of coverage in a claims investigation and may be considered insurance fraud.

Further, Bias and Darby acknowledged that “coverage may be rendered void if [Primerica] determines that any information in the application related to such coverage is false, incomplete or incorrect.”

After the policy came into force, Bias died before the expiration of the two year contestability period.  Darby submitted proof of Bias’s death to Primerica in an attempt to collect on the policy. Because Bias died during the two-year contestability period set forth in the policy, Primerica contends that it initiated a routine investigation. In the course of that investigation, Primerica contends that it discovered Bias was diagnosed with and treated for a mental or nervous disorder and that he was a regular illegal drug user.

In light of the information it discovered in its investigation, Primerica asserts that it denied Darby’s claim, rescinded its policy, and refunded the premiums paid for the policy. Darby sued asserting a breach-of-contract claim and seeking damages. Primerica moved for summary judgment, arguing that Bias’s misrepresentations on the insurance application preclude the success of Darby’s breach-of-contract claim.


Primerica supports its motion for summary judgment by citing to uncertified medical records. The medical records being unsworn or uncertified, in itself, does not bar their consideration for purposes of a summary judgment motion in federal court.

Primerica’s Motion

Under Louisiana Revised Statute Section 22:860, an insurer is not liable for the death benefit provided by its policy if the insurer can show that the insured made misrepresentations on his application for insurance.

False Statements Mental or Nervous Disorder & Illegal Drug Use

The Fifth Circuit has found that the ordinary meaning of “mental or nervous disorder” includes conditions like depression. A medical record from New Orleans East Behavioral Health Center indicates that Bias reported “panic attacks” as well as “depressed mood” to his health care providers. The same document revealed that Bias was prescribed “Zoloft titration to 100mg daily for anxiety and mood,” as well as “Hydroxyzine” for anxiety. In light of the uncontroverted evidence provided by Primerica, the Court found that there is no genuine issue of material fact as to whether Bias made a false statement by answering “no” to the question of whether he had been diagnosed with or treated for a “mental or nervous disorder” within the past ten years.

In multiple places, the medical records reflected that Bias used cannabis regularly.   Primerica, therefore, established that there is no genuine issue of material fact as to whether Bias made a false statement by answering “no” to the question of whether he had used illegal drugs in the past ten years before completing his application.

Intent to Deceive

Next, the Court considered whether Bias acted with the “intent to deceive” when he made the above representations. The intent to deceive must be determined from surrounding circumstances indicating the [1] insured’s knowledge of the falsity of the representations and [2] his recognition of the materiality of his misrepresentations, or from circumstances which create a reasonable assumption that the insured recognized the materiality.

As to whether Bias knew that the misrepresentations were material, the policy application communicates the fact in bold print. Bias and Darby both signed the application just beneath this language. There is no indication that Bias disclosed his drug use or medical problems elsewhere on his application.


To prove materiality Primerica’s Underwriter testified that had Primerica knew of the Decedent’s mental health treatment and his habitual illegal drug use at the time of the Application, it would not have issued the Policy.

Plaintiff has introduced no evidence tending to show that the misstatements were immaterial regarding defendant’s risk assumption. Accordingly, the Court concluded that no issue of material fact exists as to whether Bias’s misrepresentations materially affected the risk assumed by Primerica. Therefore, Primerica’s motion for summary judgment was granted.


Rescission is an ancient equitable remedy that exists so that no one may profit from fraud or misrepresentation or concealment of material facts. Here, the insured and the decedent lied on the application for insurance and it was established that the insurer would never have been issued on the life of Bias because of his drug use and mental disorders. Equity – fairness – required the court to affirm the rescission of the policy.

© 2021 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost

equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at and

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 53 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

Go to the podcast Zalma On Insurance at;  Follow Mr. Zalma on Twitter at; Go to Barry Zalma videos at at; Go to Barry Zalma on YouTube-; Go to the Insurance Claims Library – Read posts from Barry Zalma at; and the last two issues of ZIFL at  podcast now available at

This entry was posted in Zalma on Insurance. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.