Legal Translations of Insurance Policies
Even if a life insurance policy is written in a foreign language, it is enforceable unless a specific ground of unenforceability is found. When litigating the enforceability of a life insurance policy, the issues are essentially controlled by the law of contracts. However, when either the policy, or a clause in the policy, is written in a foreign language the additional step of obtaining a foreign language translation is required. With a foreign language translation attached, the life insurance policy can be submitted as evidence.
Regardless of foreign language clauses, a life insurance policy will be enforced unless it is shown that it was entered into as a result of fraud or deceit, that there was a breach of fiduciary duty, or that negligence was involved.
In terms of foreign language issues, the typical cause of action for life insurance policies involves the breach of fiduciary duty. The basic line of argument is that the life insurance company and/or its agent assumed a fiduciary duty in the context of the policyholder’s relationship with the company or agent. This argument is upheld when the policyholder is unable to understand the legal meaning of the documents and, thus, rely on the information provided by the company or agent. This often occurs when the signing party is a foreign language speaker and the company or agent fails to obtain a foreign language translation and instead has the signing party rely on the information they provide.
See Restatement of the Law of Trusts, Third (1991); Uniform Prudent Investor Act; and Egler, Frederick N Jr., Malak, Paul J. “The Individual Life Insurance Practice Case: A Litigation Primer.” FICC Quarterly, 1999.