John Hancock Mutual Life Insurance v. Banerji

1. Facts. Baneiji submitted his original application for an individual disability policy in 1990. When Hancock issued the policy, it attached a copy of Baneiji’s application. One of the provisions of the policy (the FEP provision) allowed a policyholder to apply for expanded monthly benefits as his annual income increased, and in 1993 Banerji sought such expanded coverage.2 Because Hancock, as is typical of disability insurers (see 12 Couch, Insurance § 182:31 [3d ed. 1998]), sought to avoid allowing its policyholders to become *907overinsured,3 the FEP application form requested information…