How to Handle Denied Life Insurance Claims

When a family purchases a life insurance policy, they do so under the assumption that the policy will pay out as promised in the event of an untimely death. Yet these policies often have many loopholes that companies will try to use to get out of paying as promised. After a loss, the last thing you want to do is have to fight with your life insurance company to deliver as promised. Working with an experienced team of lawyers who can help you through life insurance disputes is critical to protecting your rights.

Heban, Murphree & Lewandowski LLC is an experienced team of probate attorneys who understand the rights life insurance customers have. With the help of one of the attorneys at Heban, Murphree & Lewandowski, you may be able to resolve life insurance disputes and get the money you deserve after facing a loss.

Common Reasons for Life Insurance to Deny Claims

While each life insurance policy is unique, there are some common reasons that they will choose to deny claims and payments promised to beneficiaries after the death of a policyholder. Some of the more common reasons include:

1. Contestability Period

A contestability period is the first two years after a life insurance policy is purchased. During this time frame, the life insurance company has a chance to review and fact-check the information on the application. If the policyholder dies during this time frame, it usually triggers an investigation. The life insurance company wants to ensure that the policyholder didn’t have a known issue, such as a medical condition that would have caused the death. If any information was not appropriately represented in the application, the company could deny the claim.

2. Not Properly Paying Premiums

Life insurance is only valid if the premiums are paid as agreed to. Some companies have a late payment grace period, and some states require this type of grace period, but if the policyholder didn’t make a payment, the policy would lapse. In this case, the life insurance company does not have to pay.

However, beneficiaries may have some recourse on these types of problems. The insurance provider has to send premium-due notices to the correct address, for example, and must warn the policyholder that the coverage will lapse if they don’t pay. Failure to send these notices could mean the policy is still valid.

3. Not Designating Beneficiaries

Life insurance policies must name beneficiaries clearly, or the policy can be denied. Legally, the life insurance company has to know who to pay in the event of a death. If there is no beneficiary named, the policy must pay the estate of the deceased individual, which can cause delays in getting the payment into the desired beneficiary’s hands.

4. Cause of Death

Not all deaths are covered by life insurance policies. Most will have exclusions applied to the policy, and if that was the cause of death, the policy will not payout. These exclusions are worded very precisely by the life insurance company. Sometimes, beneficiaries have a hard time understanding whether or not the death will be covered. Suicide is a common exclusion for many life insurance policies. If the person takes his or her own life, then the company can deny the payout.

5. Lack of Disclosure

A final common reason for insurance companies to deny life insurance claims is a lack of disclosure. If the insurance company requires a disclosure, such as disclosing a pre-existing condition, and the applicant does not provide it, they can deny a claim. Even if that condition was not the cause of death, it could lead to claim denial.

How to Handle a Denied Claim

Regardless of the reason, if you are a beneficiary who is due to compensation, and that compensation is denied, you need to know what to do. Our legal team can help you discover why your claim was rejected and whether you have recourse. Sometimes, all that is required is sending in missing information or fixing an error on a form.

On the other hand, if the insurer cannot provide a legitimate reason or does not seem to be in line with their policy terms, an attorney’s help is necessary. If your claim denial was in bad faith, a skilled legal team might be able to help you get the money you deserve. Heban, Murphree, and Lewandowski LLC is ready to represent you in life insurance disputes and ensure your rights are protected. Reach out the moment you hear that your life insurance claims are denied, so we can begin building a case to help protect your rights.