By Pat Murphy
The Daily Record Newswire
Is there anything dicier than disability insurance?
You pay the premiums, hoping to buy some security. Then, when you actually need the benefit, the insurance company comes up with some loophole to deny coverage.
And if you just happen to succeed on a claim, there’s always the fear in the back of your mind that one day you’ll get that letter telling you that the insurer has come up with some excuse to stop payments.
That’s what happened to Jeffrey Boly. Boly is a tax attorney who lives in Multnomah County, Oregon. He turned 65 in 2007, as it turns out a key birthday in his fight for disability coverage against Paul Revere Life Insurance Company.
Boly suffers from sleep apnea, a disorder characterized by pauses in breathing or abnormally low breathing during sleep. The resulting hypoxia, or deprivation of oxygen to the body, sometimes results in permanent impairment.
Boly’s apnea went undiagnosed for years. As a result, he’s suffered permanent brain damage.
In the 80s, Boly first began experiencing abnormal daytime tiredness. A doctor ultimately diagnosed Boly’s sleep apnea, but the damage had been done and the daytime tiredness would not go away.
Because of his diminished work capacity, Boly applied for partial disability under a policy he purchased in 1983 from Paul Revere Life.
The insurer granted the claim and Boly started to receive benefits. All was well until 1996 when Boly started to notice diminished cognitive ability. A doctor related this problem back to the years when Boly’s sleep apnea went undiagnosed. As a result, Boly began receiving total disability under the Paul Revere Life policy.
But as Boly got older, he drew nearer to an important trigger in his insurance policy. The policy provides lifetime benefits for disability resulting from accidental injury, but benefits end at age 65 for disability resulting from disease or sickness.
Boly realized this could be a problem and just before turning 65 he requested that his disability be reclassified as resulting “from injury,” rather than “from sickness.”
The insurer wouldn’t go for it and predictably, when Boly turned 65, the company cut off his benefits on the ground that his cognitive impairment resulted from a disease: sleep apnea.
Boly sued for breach of contract but that lawsuit has gone nowhere. An Oregon trial court granted Paul Revere Life summary judgment. Last week, the Oregon Court of Appeals upheld that judgment.
The state court of appeals found that Boly’s brain damage “cannot plausibly be called accidental.”
The court said that this was the only conclusion because Boly’s “failure to breathe, and the undiagnosed existence of his sleep apnea, are not ‘events’ or ‘forces’ in the same sense as lightning (in the case of being struck) or gravity (in the case of falling into a hole).”
In explaining why Paul Revere Life had correctly interpreted its insurance contract in cutting off Boly’s benefits, the court said that “the typical purchaser of insurance, applying his or her common understanding, would regard [Boly’s] disability as analogous to organ failure or damage that results from a disease that a person catches by (involuntarily) coming into contact with a contaminated surface or inhaling a fellow airplane passenger’s sneezed virus. Such disabilities do not result from accidental bodily injury, as those terms are used in normal discourse.” (Boly v. Paul Revere Life Insurance)
