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When attorney Joseph E. Lewis of Stevens & Lee died in March, his widow expected to receive a $1 million death benefit, but the firm’s insurer paid just $770,000 and said Lewis was not entitled to the increased policy because he had not submitted to a recent medical exam. Now the law firm has filed suit in U.S. District Court against American United Life Insurance Co., claiming that it reneged on a promise to increase the firm’s death benefits across the board — without any medical exams required. The suit says Reading-based Stevens & Lee previously offered a death benefit from Sun Life Assurance Co. of Canada that paid twice the salary of the deceased employee, up to $800,000. Under the Sun policy, death benefits up to $600,000 were guaranteed without any “evidence of insurability” requirement, but those earning more than $300,000 were required to submit to a onetime medical exam to qualify for larger amounts. By December 1998, Lewis and several other lawyers at the firm had submitted the proof and qualified for an award of more than $600,000. At that point, Stevens & Lee sought a new insurer to increase death benefits to a maximum of $1 million. The suit says American United agreed to replace the Sun coverage and promised that firm employees would not have to submit to new medical exams. At the time American United took over providing the coverage, Lewis was earning $385,000 and was, therefore, entitled to a $770,000 death benefit. By the time he died — more than two years after American United took over — Lewis was entitled to a $1 million death benefit, the suit says. (Lewis’ son, attorney Joseph G. Lewis, continues to work at Stevens & Lee, having practiced with his father for seven years before his father’s death.) But when the firm submitted a claim for $1 million, the suit says, American United claimed that Lewis was grandfathered in with only the coverage he had at the time of the transition and that any increase above $770,000 “would be subject to evidence of insurability.” In its suit, the firm alleges that its policy with American United makes no mention of any grandfather clauses and nothing that would warn any employee that a new medical exam might be demanded. Stevens & Lee attorney E. Thomas Henefer filed the suit, citing claims of breach of contract and bad faith. The case, Stevens & Lee v. American United Life Insurance Co., 02-cv-0425, has been assigned to U.S. District Judge Anita B. Brody.

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