In a lawsuit filed in federal court, four families of military veterans claim that the Department of Veterans Affairs and Prudential Insurance owes them restitution. While we often -- perhaps too often -- come across complaints that an insurer has failed to pay a life insurance claim, there is more red tape to this case than to most. And there is red tape that Florida's military families should know about.

Each of the service members in the case -- the insureds -- committed suicide. Life insurance companies have traditionally not looked favorably on paying benefits in suicide cases. So the denial here makes sense at first. But that isn't the reason the claims were denied. It wasn't so much a question of coverage under the circumstances as it was that the veterans had not followed instructions.

The lead plaintiff is the father of a decorated Iraq war vet. When his son got home after his tour, his parents saw that he had changed. According to the complaint, his son's personality changed markedly; he complained of physical pain and anxiety, and he suffered memory losses. Medical treatment did not help, and, to quote the complaint, "on August 28, 2009, he walked to the garden, saluted his father in military fashion, placed a gun to his head and pulled the trigger."

Now, the federal government carries life insurance for every member of the Armed Forces. The father was the sole beneficiary of his son's policy, which would have paid $400,000 upon his son's death. But Prudential denied the claim.

There are two types of life insurance, it turns out: one for active military and one for veterans. The policy for active duty personnel terminates 120 days after the service member leaves the military. The same thing happens if the service member has been disabled. It is the veteran's responsibility to convert that policy to the veteran's policy.

And therein lies the problem. We'll continue this in our next post.

Source: Courthouse News Service, "Prudential, USA Stiff Families of Suicidal Veterans, Kin Claim," Cheryl Armstrong, July 12, 2012