Utah Woman’s Life Insurance Claim Goes Unpaid Despite Paying Premiums

Apr 12, 2021, 10:22 PM | Updated: 11:33 pm

SALT LAKE CITY, Utah — 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.

“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.”

KSL 5 TV Live

Top Stories

KSL Investigates

A bus driver fills up at a gas station in Brooklyn on August 11, 2022 in New York City. While fuel ...
Matt Gephardt

Gephardt Busts Inflation: Ways you can save money at the gas pump

Inflation remains high for several reasons and one of the biggest is tied to gas prices. But you can bring down the price you pay with some relatively simple changes in your driving habits.
3 days ago
KSL’s Matt Gephardt fuels up his minivan to determine how much gas Google Maps’ eco-friendly ro...
Matt Gephardt & Sloan Schrage

Gephardt Busts Inflation: Can Google’s eco-friendly routes really save you gas money?

Gas prices have edged down from their record highs, but they are still a far cry from being affordable for many Utah families. So, when Google rolled out a new feature for its Maps navigation app that says it can save you money on gas by using suggested eco-friendly routes, the KSL Investigators decided to put it to the test.
4 days ago
FILE: Back-to-school shopping (Photo by Justin Sullivan/Getty Images)...
Matt Gephardt & Sloan Schrage

Gephardt Busts Inflation: Saving $ on back-to-school supplies with inflation

With inflation running amok this year, parents are tackling big price hikes on top of the stress. Fortunately, there are ways they can still save money.
7 days ago
Matt Gephardt & Sloan Schrage, KSL TV

KSL Investigators help bank customer regain access to his money after fraud incident

KSL Investigators help a fraud victim gain access to his bank account after nearly a year of being locked out.
10 days ago
Matt Gephardt & Sloan Schrage, KSL TV

What are the rules for airline travel credits?

After canceling a beach vacation to Hawaii, a Utah woman believes she has $1,400 in flight credits. Ongoing flight cancellations have plagued the summer travel season, and a lot of travelers are being made whole with flight credits rather than refunds.
11 days ago
FILE PHOTO - Shown are a smartphone and computer....
Matt Gephardt

Can a company pull the rebate runaround?

When a West Valley City woman took up Verizon on a rebate offer to upgrade but could not get the rebate, she contacted the KSL Investigators for help.
17 days ago

Sponsored Articles

tips how to quit smoking...

7 Tips How to Quit Smoking | Quitting Smoking Might be One of the Hardest Things You Ever Do but Here’s Where You Can Start

Quitting smoking cigarettes can be incredibly difficult. Here are 7 tips how to quit smoking to help you on your quitting journey.
Photo: Storyblocks...
Blue Stakes of Utah 811

Blue Stakes of Utah 811: 5 Reasons To Call 811 Before You Dig When Working in Your Yard

Call before you dig. Even at home, you could end up with serious injuries or broken utilities just because you didn't call Blue Stakes of Utah 811.
Days of...
Days of '47 Rodeo

TRIVIA: How well do you know your rodeo? Take this quiz before you go to the Days of ’47!

The Utah Days of ’47 Rodeo presented by Zions Bank is a one-of-a-kind Gold Medal Rodeo being held July 20-23, 25 at 7:30 PM. The Days of ’47 Rodeo How well do you know your rodeo trivia? Take the quiz to test your know-all before heading out to the Days of ’47 Rodeo at the […]
cyber security through multi factor authentication setup...
Les Olson IT

How multi factor authentication setup helps companies stay safe

Multi factor authentication (MFA) setup is an important security measure that every company should implement for their workers. It’s also wise to install it for your personal and home accounts.
Lighting Design

Check out these stunning lamps with stained glass shades

Lamps with stained glass shades are statement pieces that are more than simply aesthetic. They also meet a functional requirement: to light up a room.
Address Bar of internet browser shows internet access...

Utah voters 50+ support increased access to Internet

The AARP surveyed Utah voters aged 50 plus about internet access and if they support the expansion of broadband, especially in rural areas currently lacking it.
Utah Woman’s Life Insurance Claim Goes Unpaid Despite Paying Premiums