SALT LAKE CITY — One Utah woman was paying the premiums on her life insurance policy, so why did the insurance company tell her family the policy was no good after she passed away?

Shaela Savage died in October of 2019, one day after giving birth to a son.

Devastated, her parents took in their grandson and tried to claim the $150,000 voluntary life insurance policy for which Savage had signed up at work.

Her mother, Kari Escher, said it was a glimmer of hope in the midst of unimaginable tragedy.

“We’re going to be able to provide for him and be able to give him a college education and do all of this stuff, you know, so we we’re really happy about that,” she said.

Those dreams were short lived as the claim was denied. The insurance company said Savage didn’t actually have voluntary life insurance.

Savage had been paying for it. Month after month, $6.23 was being deducted from her paycheck for the voluntary life insurance. The application, which was filled out by her human resources department, shows she indeed signed up for a $150,000 policy.

Escher protested.

“They responded, ‘Nope, Shaela didn’t fill out the evidence of insurability, so therefore, she’s not entitled to it,’” Kari said.

Rather than a check for $150,000, the insurance company sent a check for $63.71 — a refund of the premiums Savage had paid before she died.

A young, pregnant woman was paying for life insurance. She died shortly after giving birth to a son. Now her family is being told that the life insurance policy is no good. The lessons her family says all Utahns need to hear. You ask, @KSLInvestigates tonight on @KSL5TV at 10PM. pic.twitter.com/JxFgMeRJD7

— Get Gephardt (@KSLGephardt) April 12, 2021

“This is not okay,” said Escher.

Escher hired a lawyer and is taking both her daughter’s employer and the life insurance company to court. Because of the lawsuit, neither would comment to KSL-TV, but they responded to the court saying, more or less, exactly what they told Escher.

The life insurance company, Lincoln National, wrote that the policy was never “approved.”

Priority Dispatch, where Savage worked, said she “did not complete enrollment.”

Despite collecting premiums, both companies want the case thrown out. Priority Dispatch is also asking the court to slap Escher with the bill for their attorney fees.

Brian King, a lawyer who specializes in fighting insurance companies, said “they look for reasons to deny claims when they can.”

King said it is common that someone dies with some sort of omission on a life-insurance-company form and judges will, sometimes, tell an insurance company they have to pay anyway.

“If it doesn’t have anything to do with why the person actually died, the insurance company can’t use that as a basis to get out of paying the claim,” he said.

With that said, the laws tend to favor insurance companies, King said, especially in the cases of life insurance when the only best witness is gone.

Even if a company was taking premiums for voluntary life insurance, that doesn’t necessarily guarantee coverage, he said.

“Not if you have failed to disclose information that was requested during the application process,” King said.

How do you know that you’ve done everything right before you die?

“Well, you don’t. There’s no way of knowing for sure,” said King.

His advice to folks who have life insurance was to document everything and make sure your loved ones know where to find it, just in case your death forces your family to court.

He said denials do tend to be rare if all forms were filled out honestly and the premiums were paid.

While Escher continues the fight she hopes will pay off for her grandson, she said she also hopes this story, if nothing else, prevents a similar situation from befalling another family.

“She had signed up for insurance to protect, you know, her family should something happened to her,” said Escher. “This is an issue people really, you know, they’re trying to do the right thing. They’re trying to care for their families, should something happen to them and all of a sudden, they pass away, and now they don’t get the benefits of what they thought they were going to get for their families.”