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Employee on Medical Leave Is "Active" Employee for Life Insurance Purposes
Description Appeals court affirmed judgment in favor of a life insurance policy beneficiary who had been denied benefits from a policy that covered his wife. Her employer provided the policy. The insurer had claimed that since she was on medical leave when she was killed in an accident the policy was not in force. The court held that she was an "active" employee under the policy.
Topic Insurance
Key Words Life Insurance; Ambiguous Term; Reasonable Expectation
C A S E   S U M M A R Y
Facts Tester began working for Bibb in 1993. Like all employees at Bibb, she participated in group life insurance. She designated her husband as her beneficiary. Due to health problems, her last day on the job was January 8, 1995. On February 15, while still on medical leave, she was killed in a car accident. The insurer refused to pay the death benefit because she was not a "member of the eligible class," which the policy defined to be "active, full-time, and part-time employees." Her husband sued, the trial court awarded him the death benefits. Insurer appealed.
Decision Affirmed. Tester was an "active" employee at the time of her death. When the term of a policy is ambiguous, the court must construe it against the drafter and in accordance with the reasonable expectations of the insured. Tester was on medical leave at the time of her death; she apparently intended to return to work and her employer expected her to return. Hence, she was a member of the eligible class and the policy was still in effect.
Citation Tester v. Reliance Standard Life Insurance Co., 228 F.3d 372 (4th Cir., 2000)

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