Author: Lydia Adams

When an insured person dies, the insurance provider is expected to honor the claim filed by the beneficiaries and pay out the death benefit promptly. For a variety of reasons, however, some claims are delayed or even denied. 

If and when it happens, experienced life insurance attorney can investigate the reason the claim was not paid, advise you as to whether the insurance provider may have acted in bad faith, and take the appropriate legal action on your behalf.

Common Reasons Why an Insurance Provider Might Reject a Claim

#1 Concealment or Material Misrepresentation

If an insured person dies within the first two years after a life insurance policy is issued, the insurance company has the right to contest the payment of the death benefit for any material misrepresentation made or concealed in the application. This is called the contestability period. It is the most common reason cited by insurance companies for rejecting death benefit claims. If the company’s investigation reveals that the policyholder concealed information or made a material misrepresentation in the application, they have the right to reject the claim and refuse to pay out the death benefit to the beneficiaries. 

Unfortunately, insurance companies take any death that occurs within two years as an opportunity to search for any misrepresentation, no matter how insignificant, as a reason to deny the claim.

#2 Suicide

If the company believes that the policyholder’s death was a suicide, they have the right to deny the claim, but only if the death occurs with the period of contestability.

#3 Accidental Death Policies

An accidental death policy is NOT a life insurance policy. It covers only death that occurs as the direct result of an accident. Insurance companies will challenge the payment of accidental death benefits for many reasons. The most common is if was caused or resulted from an illness or a deliberate act of the insured person. Such policies are very complicated and often contain many exclusions, such as intoxication, the taking of non-prescribed medication, and other exclusions. Claims made under these policies are rejected at a higher rate than any other life-related claim.

#4 Lapsed Policy

In some cases, the insurance company might claim that the policy had lapsed before the policyholder died due to non-payment of premiums. However, if the insurance company failed to give proper notice to the policy owner before the lapse, the company may still have to pay the claim.

When Do You Need a Life Insurance Lawyer?

If the insurance provider denies your claim, unless you are a life insurance expert, you may not be able to evaluate whether the denial was legitimate or if the company is acting in bad faith. That is why you need life insurance claims denial attorney to represent you. 

An experienced life insurance lawyer is usually aware of the tactics used by insurance providers to deny and delay claims. It is their job to know the state and federal laws that govern life insurance, and they can evaluate whether those laws are being used to avoid paying out death benefits. The key to winning any life insurance dispute is to devise the right strategy to overcome the reasons for the denial of a claim by the insurance provider and to collect the evidence needed to build the strongest possible case. 

Once an insurance provider denies a claim, you should consult a lawyer right away. What you should not do is attempt to convince the company to change its decision by yourself. Unless they are challenged by an attorney who has the knowledge, experience, and resources to litigate, an insurance company is unlikely to reverse a decision to deny a claim. In such situations, you will want to hire a lawyer who has extensive litigation and trial experience who also understands life insurance issues. 

The loss of a loved one can be unbearably hard to cope with. When a claim is denied or delayed, it may be impossible to deal effectively with the insurance company. Your best option at that point is to consult with a life insurance attorney who can evaluate the situation and take legal action on your behalf if necessary.

Call an Experienced Life Insurance Claims Attorney in California

Benjamin Blakeman has more than 40 years of experience as a business litigation attorney. Blakeman Law has focused exclusively on life insurance for the last 13 years. He was active in life insurance sales for 7 years. He understands life insurance from the inside out and can provide you expert legal advice on life insurance, annuities, and financial elder abuse. Given this depth of experience and his background, he is uniquely qualified to provide the most valuable assistance available to anyone in need of life insurance services. To learn how we can help you, call us at 1-888-270-0051 or complete our online contact form.

Annuities can provide you with a regular and reliable stream of income in your retirement. At the same time, annuities also have unique risks and drawbacks. They are not the right investment for everyone. 

Unfortunately, many agents tend to sell annuities to unsophisticated consumers – the elderly in particular – without disclosing the risks involved. Such sales tactics are prohibited by law, as life insurance agents and securities brokers have a duty to disclose all material risks to their clients. 

If they fail to do so and you suffer financial losses, you can take action against them with the help of an annuity fraud attorney.

Four Signs of Annuity Fraud

#1 The Rushing Tactic

If the agent rushes you to buy an annuity, it is always a bad sign. If they tell you that you need to buy it right away without giving you enough time to think it through, you should seek a second opinion or contact an attorney before signing anything.

#2 Not Disclosing the Details

Life insurance agents and securities brokers are required by law to disclose the risks associated with investing in annuities. Variable annuities, particularly, are considered high-risk investments because they can lose money, and the ultimate value and payout are entirely dependent on non-guaranteed market performance.

Another major disadvantage of variable annuities is the fact that they are classified as securities and are usually subject to a rule that forces the owner to litigate any dispute before the Financial Industry Regulatory Authority, or FINRA

If an agent has sold you a variable annuity without disclosing that you can suffer significant losses, you may be a victim of annuity fraud. In such a scenario, you should consult an experienced annuity lawyer to find out if you can take action against the agent and recover damages.

#3 Not Telling You About the Surrender Period

Almost all deferred annuities have a surrender period. If you withdraw your money or cancel your annuity during this period, you will usually have to pay surrender charges, which can be quite significant. You may also have to pay tax penalties if you are under retirement age.

If you are an elderly person whether or not you suffer from a chronic or critical disease, locking up your money for a period of time may be a bad idea, especially if you do not have any other source of income. Sales agents are obligated to tell you about the surrender period and the charges and penalties involved for making withdrawals.

#4 Churning and Twisting

Churning or twisting are terms for a fraudulent practice wherein an agent convinces you to surrender an existing annuity to buy a new one, thus incurring surrender charges. The usual purpose of the sale is to generate commissions for the agent.

There are laws in place that required not only agents to disclose the advantages and disadvantages of the purchase. In most of these cases, the agent’s commission is the only real reason for the sale. Many insurance companies have added riders to their products that purport to compensate the purchaser for surrender charges incurred when they exchange an existing annuity for a new one – such riders rarely, if ever, provide sufficient compensation, and they usually also increase the annual expenses of the product, resulting in a significant net loss to the client.

Contact an Experienced Annuity Attorney Today

If a salesperson attempts to persuade you to buy an annuity that does not suit your financial needs, you should get a second opinion, or seek advice from an annuity fraud lawyer who can help you take action against the agent or broker responsible. 

Benjamin Blakeman has more than 40 years of experience as a business litigation attorney. His practice, Blakeman Law, has focused exclusively on life insurance and annuities for the last 13 years. He was active in the life insurance industry for 7 years. He understands life insurance and annuities from the inside out and can provide you expert legal advice on life insurance, annuities, and financial elder abuse. To schedule a consultation, call us at 1-888-270-0051 or complete our online contact form.

Buying a life insurance policy is perhaps the easiest way to provide a financial safety net for your dependents in your absence. Choosing the right policy, however, is not an easy task, especially if you are buying life insurance coverage for the first time and have no idea what to look for in a policy. 

Given below are four mistakes you must avoid while buying a life insurance policy.

1. Underestimating Your Life Insurance Needs

This is the single biggest mistake you can make when it comes to buying life insurance coverage. In the event of your untimely death, your family will have to depend on the proceeds from your life insurance policy for their financial needs. 

If the payout is not sufficient, they might struggle to meet their short-term and long-term financial needs. Ideally, the proceeds from your life insurance policy should be sufficient to pay off your mortgage and other debts, replace your income for a period of time, and pay for your children’s education.

2. Choosing the Wrong Kind of Life Insurance

If you need life insurance only for a finite period of time, it would be a mistake to buy permanent life insurance, and vice-versa. The most purpose of life insurance is to protect your financial dependents. Once your mortgage is paid off and your kids are self-supporting, you might no longer feel you need life insurance. So, a term life plan which is designed to provide you with life insurance coverage for a specific period of time – anywhere from 10 to 30 years – might be the right choice for you. On the other hand, if you want to leave a tax-free legacy to your spouse, children or other dependents, term life is the wrong choice and should not be used unless that is all you can afford.

Permanent life insurance is designed to provide you with life insurance coverage until your death but requires a much greater cash outlay than a term life policy. Most such policies also have cash values that may be borrowed against as needed.  There are many situations in which permanent life insurance is called for, including special needs children, a large mortgage, business buy-sell agreement, large estates that might incur significant estate taxes, and any situation in which one’s spouse is dependent upon their income.

3. Not Designating a Proper Beneficiary

The following mistakes should be avoided while designating a beneficiary for your policy.

• Failing to name a beneficiary  
• Naming a minor child as the beneficiary
• Not naming a secondary or contingency beneficiary 
• Not updating your policy after getting a divorce, marrying again, or adopting a child
• Not updating a policy when a beneficiary dies
• Naming a former spouse as a beneficiary in states where former spouses are disqualified from receiving life insurance proceeds
• Naming someone other than your spouse in a community property state without your spouse’s written permission

The aforementioned mistakes can lead to delays, litigation, claim denials and loss of all or part of the life insurance benefit by your intended beneficiary.  In such cases, your intended beneficiary may have to hire a life insurance attorney to try to recover the proceeds from the insurance provider through negotiation, mediation, arbitration, or litigation. Disputes are usually resolved through interpleader litigation, which is time-consuming and very expensive.

4. Not Comparing Life Insurance Policies

The cost of a life insurance policy tends to differ from one company to another. In addition, each company has its own underwriting guidelines and features. This can be important if you have any kind of disease or disability if you are on medication for high blood pressure or cholesterol, if you have had heart problems or any medical or non-medical issue that could affect the underwriting of the policy.

In addition, all companies are not created equal. It is important to choose a company that is highly rated by the rating agencies. Why? Because you want to use a company that will still be there when it’s time to pay a claim. A. M. Best and Standard and Poors are the most commonly referenced to evaluate the financial strength of the company. You should not buy life insurance from any company not rated A+ unless you understand why you are doing it (the fact that is the cheapest is not a valid reason).

How a Life Insurance Lawyer Can Help You

If there is an unreasonable delay in processing your claim or if your claim is rejected by the insurer altogether, you need a good life insurance claims attorney who can represent you and negotiate with the insurance company on your behalf. If the negotiation or mediation fails, the attorney might be able to recover the claim amount you are owed through litigation.

Trustworthy Life Insurance Attorney in California

Whether it is mediation or litigation, Benjamin Blakeman of Blakeman Law is an experienced life insurance attorney ready to fight for a favorable resolution on your behalf. To learn how Blakeman Law can help you, call 1-888-270-0051 or complete our online contact form for a consultation.

When you buy life insurance coverage from an insurer, you enter into a contract with them. You are required to pay the premiums according to the contract to ensure that the policy is in place as long as you live. They are required to pay your beneficiaries in the event of your death. 

Unfortunately, disputes arise for a variety of reasons, and some insurers even act in bad faith at times, either denying or delaying payment of a claim without a legitimate reason. In such cases, you have no option but to take action against them with the help of a life insurance attorney. 

Depending on the circumstances, the attorney might try to resolve the dispute through negotiation, mediation or litigation.

The Advantages of Life Insurance Mediation

Mediation is an attempt by a neutral third party to resolve the dispute either in advance of or during litigation. It involves a negotiation process between the parties to the dispute. The process is facilitated by the attorney, who plays the role of advocate to persuade the mediator to convince the other side to offer a favorable settlement. 

The most important advantages of mediation are that it avoids the cost and uncertainty of litigation and it saves time. Your attorney plays a critical role in the mediation process to help achieve a fair and favorable settlement. Those with the most extensive knowledge and experience can come up with most creative solutions to settle the dispute, something which a less experienced attorney or a judge might not be able to do. 

Mediation is voluntary and non-binding. You are not obligated to accept the offer made by the insurer. It is not a trial, there is no testimony, and it is completely confidential. No one can use any statement or offer made in mediation as evidence in litigation. If successful, it can save time and significant cost that results from protracted litigation. Most importantly, you get certainty.

Disadvantages of Mediation

In some cases, an insurer may not take the mediation process seriously and may send someone with low-dollar authority as their representative. The insurer might also use the mediation process to learn about your case in an effort to defeat you in subsequent litigation. (Of course, you will have the same opportunity to learn about the case against you.) Any successful mediation is a compromise. The insurer or the other party will attempt to persuade or coerce you to accept a less than you are entitled to or are willing to accept.

The Advantages of Life Insurance Litigation

The biggest advantage of life insurance litigation is that it forces the opposing party to provide you with information you would not otherwise be able to obtain, in order to prove your case. You can take depositions and order the production of documents that provide evidence in your favor. A judgment also provides you with an enforceable order.  If the court or jury decides in your favor, the other party must comply with the order. 

The Disadvantages of Life Insurance Litigation

The disadvantages of litigation are that it is time-consuming, expensive, and the result is uncertain.

Mediation vs Litigation: Which is the Right Option for You? 

While both processes have their own advantages and disadvantages, mediation is often the better option for a few reasons: 

• It costs far less than litigation. 
• It can help you resolve the dispute with your insurer in a timely manner.
• It provides certainty of the result. 
• A life insurance mediator can come up with out-of-the-box solutions to resolve the dispute, which is something that might not be possible within the confines of the legal system. 

If you cannot resolve your dispute through mediation, you will have file a lawsuit against the insurer. So, your best bet is to hire a highly experienced attorney who is both an effective litigator and an effective mediator.

Life Insurance Mediation and Litigation Services in California

Whether it is mediation or litigation, Benjamin Blakeman of Blakeman Law is an experienced life insurance attorney who is ready to fight for a favorable resolution on your behalf. To learn how Blakeman Law can help you, call 1-888-270-0051 or complete our online contact form for a consultation.