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.
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.