Business Law Insurance Policy Incapacity or Not Discussion

Week Six Discussion: Incapacity or Not?
Please discuss the following case study: Globe Life Insurance Company has undertaken a
new sales program that targets neighborhoods in Los Angeles where drive-by shootings
were a nightly occurrence. Two such shootings occurred in which children were killed as
they sat in their living rooms. Globe salespeople were instructed to “hit” the houses
surrounding those where children were victims. They were also told to contact the
parents of those children to sell policies for their other children. TomRaskin, an
experienced Globe salesman, read of a drive-by shooting at Nancy Leonard’s home, in
which Leonard’s 5-year-old son was killed. The Los Angeles Times reported that Leonard
was a single parent with four other children. Raskin traveled to Leonard’s home and
described the benefits of a Globe policy for her other children. He offered her the
$10,000 term life policy for each of the children for a total cost of $21 per month.
Leonard was in the process of making funeral arrangements for her son,
and Raskin noted, “See how much it costs for a funeral.”
Leonard had been given several tranquilizers the night before by a physician at the
hospital’s emergency room. The physician had also given her 15 more tranquilizers to
help her through the following week. She had taken one additional tranquilizer an hour
before Raskin arrived, using a Coors Lite beer to take the pill.Leonard signed the
contract for the policy. After her son’s funeral, she received the first month’s bill for it
and exclaimed, “I didn’t buy any life insurance! Where did this come from?”
Discuss whether Leonard had legal standing to sue Globe.
(1) Did she have to pay for the life insurance?
(2) Discuss the ethical issues involved in the Globe’s sales program.
(3) Discuss the legal issues involved in Raskin’s decision to target Leonard the day after
her son’s death.
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