"MetLife wholly ignored Kellogg's counsel's request for documentation," the court wrote. "The car crash -- not the seizure -- caused the loss at issue, i.e. Brad Kellogg's death."

Kimball then ordered the insurer to pay the full face value of the accidental death policy, as well as $75,377 in legal fees and 10% interest.

Medical errors

Under ERISA, insurers have also been able to dispute the nature of deaths that involve medical errors. In February 2007, Trudy Barnes, a 31-year-old housewife in Wills Point, Texas, had elective surgery for scoliosis, an abnormal curvature of the spine.

During the procedure at Baylor Regional Medical Center in Plano, an anesthesiologist incorrectly inserted a catheter into her chest, causing massive internal bleeding, a medical examiner found. She died two days later.

Her husband, Clint, an aircraft mechanic, had purchased an American International Group accidental death insurance policy for her in 2004. The coverage came through a group plan from his employer, L-3 Communications Holdings Inc., a company in New York that maintains Air Force planes. It was Trudy Barnes' only life insurance policy.

AIG sent a letter to Clint Barnes on Sept. 6, 2007, saying it wouldn't pay out on the policy.

'We regret'

"This is an accident-only policy and does not cover sickness or disease," AIG, then the world's largest insurer, told Barnes in a letter. "We regret that our decision could not be favorable."

Barnes says he couldn't believe an insurer could make up such an excuse.

"How could they say that when the death certificate says it's an accident?" he asks. He needed $16,000 for his wife's funeral, he says, and he expected to get the money from her insurance.

Barnes sued AIG for breach of contract in July 2008 in New York. His lawyer, Michael Quiat, says insurers face no risk when denying claims under ERISA.

"From a business standpoint, it makes perfect sense for them," he says.

On Feb. 4, 2010, U.S. District Court Judge Denny Chin granted Barnes' motion for summary judgment, meaning he found the facts against AIG so overwhelming that there was no need for a trial.

'Arbitrary and capricious'

"This was an unintentional, unexpected, unusual and unforeseen event -- an accident," the judge ruled. "AIG's determination to the contrary must be set aside as arbitrary and capricious."

AIG paid Barnes the $148,000 death benefit, along with unspecified interest and attorney fees of $50,533.

AIG spokesman Mark Herr declined to comment on the specifics of the case. "It is AIG's practice to conduct a good-faith review of all claims submitted to determine whether a particular claim is covered," Herr says. "If a claim is not covered by the policy in question, we do not pay it."

Barnes says he can see now why life insurers would routinely deny legitimate claims.

"They know the average person doesn't know what to do," he says. "They figure you're the little guy. Just pay us your money, and we'll keep it."

A death in a war zone

One of the highest-profile cases of an insurer refusing to pay a death benefit claim involved television correspondent David Bloom. He reported live from Iraq for NBC News for 18 days in 2003.

Bloom rode with U.S. troops as they fought their way into Iraq to topple the Saddam Hussein regime. He spent up to 20 hours a day sitting with his knees bent, jamming his 6-foot frame into a 2-foot-by-3½-foot space inside an M88 tank recovery vehicle, says his cameraman, Craig White.

"We were unable to straighten our legs, and we weren't able to stand," White says. "Added to this, we were required to wear chemical gear, flak jackets with trauma plates and helmets."

On April 2, 2003, Bloom hurt his left foot leaping from the vehicle to the sand, White says. Four days later, the journalist collapsed and died. He was 39.

A blood clot from his leg, called a deep vein thrombosis, had traveled through his bloodstream to his lungs, causing a fatal pulmonary embolism, his autopsy revealed.

MetLife, which provided insurance for General Electric Co., then the parent company of NBC, paid Bloom's widow, Melanie, $2.9 million on his term life policy. The insurer refused to pay on Bloom's $1.2 million accidental death policy.

One doctor's opinion

In a denial letter dated July 23, 2003, MetLife said Bloom had died because his genetic background had made him three to six times more at risk of a deep vein thrombosis than the average person.

MetLife relied on Clayton Hauser, a St. Petersburg, Fla., family physician. Hauser is the same doctor who in 1994 performed a drug test that caused a new employee at Bankers Insurance Group to lose her job because of what she ate for breakfast.

The insurer dismissed Julie Carter after Hauser determined she had tested positive for morphine. Actually, Carter was clean; she had just eaten two poppy seed bagels.

Carter sued Bankers under a federal law protecting workers wrongly accused of drug use. She won $859,000 from the insurer.

"That's not my fault," Hauser says of the false positive for Carter. "That's what the lab reported. I collected a urine sample."

Blaming genetics

Abraham Jaros, Melanie Bloom's attorney, asked three medical experts to examine her husband's death, and each determined it was accidental. Kenneth Hymes, a professor at New York University School of Medicine, concluded that MetLife was wrong to blame David Bloom's genes for his death.

"That would be like saying the cause of a fire was oxygen rather than gasoline or a match," Hymes wrote on Nov. 18, 2003. "Almost every person has some genetic mutation. Mr. Bloom had this gene mutation for 39 years, traveled extensively on airplanes with cramped conditions and experienced no problems."

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Melanie Bloom sued MetLife in federal court in New York in July 2004, and the company settled for an undisclosed amount in October 2005. She declined to comment in detail on the case.

"Given the painful and deeply personal nature of this matter, I am not able to participate," she says.

In Colstrip, Jane Pierce says the odds are stacked against families when insurers wrongfully deny benefits.

"I think it's just a racket," she says.

Sitting at her kitchen table, she recalls how husband Todd's health had been improving just before his fatal crash and how they were looking forward to skiing in the winter. Two years after he died, his voice is still on their home answering machine.

She says she got the strength to fight the life insurance company from Todd, who would never give up.

"He'd amaze me," she says.

This article was reported by David Evans for Bloomberg Businessweek.