Case Story: Our Client v. Sun Life Assurance Company

Our client, the plaintiff in this case,[1] had worked for Krystal Corporation, a regional hamburger restaurant in the southeast, for thirty-one years.  Most recently our client had worked as the head of Krystal’s Human Relations department.  In November 2003, the plaintiff stopped working when they suffered a cerebral hemorrhage[2] as the result of a ruptured aneurysm[3]and underwent brain surgery that left them severely disabled. During the time of the plaintiff’s illness, Krystal was providing their employees life insurance through Jefferson Pilot Financial Insurance Company (“Jefferson”).

However, beginning January 1, 2004, Krystal replaced their Jefferson policy with Sun Life Assurance Company (“Sun Life”). On June 1, 2004, the plaintiff attempted to return to work at Krystal, but four months later, the plaintiff retired on September 29, 2004, due to poor health. Both Jefferson and Sun Life had a “Life Waiver of Premium[4]” provision (“LWOP” provision) that allowed the plaintiff to keep his insurance without paying premiums if they were “totally disabled” when they quit working.

The plaintiff filed a claim for continued coverage under the LWOP provisions of both policies, but both companies denied him the coverage. Jefferson argued the plaintiff was not “totally disabled” because they returned to work for four months in June of 2004 and was paid in full. In June of 2004, the plaintiff’s coverage under Jefferson ended due to Krystal replacing its Jefferson Pilot policy with Sun Life. On the other hand, Sun Life argued the plaintiff was never covered under their policy because they were disabled before they attempted to return to work in 2004. Thus, the plaintiff was not actively at work, and for that reason, they were not covered under Sun Life’s policy. Ultimately, the plaintiff passed away, and their claim for life insurance coverage transformed into a claim for life insurance benefits for their widow.

The court found in favor of the plaintiff because the plaintiff’s attempt to return to work for four months in 2006 should not be used as the basis to deny his claim for benefits under the Jefferson Pilot policy. Jefferson did not define “gainfully employed” in their policy, but the court found “[t]he fact that [the covered employee] remained on the payroll…is not determinative as to whether or not they were disabled during that time.” Rochow v. Life Ins. Co., 482 F.3d 860, 865 (6th Cir. 2007). Jefferson justified denying the plaintiff’s claim for benefits because the plaintiff received consistent work and was paid for what they had done; however, being paid for working does not mean an employee is automatically deemed not disabled. Claimants should not be penalized for attempting to work because receiving full wages for consistent work does not mean the employee has “the actual capacity to perform the work required by that employment.”  Affirming the underlying district court decision, the court held Jefferson was liable to pay the plaintiff’s widow life insurance proceeds.


[1] Our original client was the employee of Krystal who became disabled.  After they passed away, their spouse, the beneficiary of their life insurance, became the plaintiff, but to make this easier to read, we refer to just one plaintiff in this summary.

[2] A cerebral hemorrhage is bleeding within the brain. Elias A. Giraldo, Intracerebral Hemorrhage, Merck Manual,,-spinal-cord,-and-nerve-disorders/stroke-cva/intracerebral-hemorrhage.

[3] An aneurysm is a bugle or dilation in the wall of an artery. John W. Hallett, Aneurysms of Arteries in the Arms, Legs, Heart, and Brain, Merck Manual,,-legs,-heart,-and-brain.

[4] Premium is the money that a person pays in return for an insurance company’s protection. Premium, Black’s Law Dictionary (2nd ed.).

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