Common Insurance Company Justifications for Denying Life Insurance Claims

When an insurance company denies a claim by beneficiaries under a life insurance policy, the financial impact on the policyholder’s family can be devastating.  The objective of life insurance is to protect your family’s standard of living if you die.  Insurance companies recover enormous profits by denying liability or paying nominal settlements because policyholders do not fight unjustified denials and meager settlements.  As a Miami insurance law firm, we have the helped many policyholders to appeal denials and to fight for a full and fair resolution of your claim.

One of the most common grounds used by life insurance carriers to deny claims is to allege that the policy has lapsed.  Sometimes beneficiaries of life insurance policies are shocked to learn that a policy has been denied for failure to make a payment after timely submission of premium payments for many years.  Unless you are an insurance agent or insurance claims attorney, you might find it difficult to understand the policy terms and state law involving lapses in coverage resulting from non-payment of premiums.

The legal principles and contract terms related to coverage lapses are complicated and continuously changing.  Insurance companies can be subject to legal obligations to update their insurance policies and practices to conform to these changes in the law.  However, the conduct of insurance companies can provide options for an experienced insurance coverage lawyer to challenge the defense of a lapse of coverage based on missed premium payments.  Some of these defenses include:

  • Failure to provide a proper premium due notice to the insured’s correct address
  • Lack of notice to an insured of an imminent lapse in coverage
  • Lack of compliance with current law in terms of the policies and procedures

Another common basis used by insurance companies for denying a life insurance claim involves non-disclosure or misrepresentations in the application.  Because of the risk of insurance companies “sandbagging” such defenses while continuing to collect premiums, insurance companies generally must raise defenses based on information in the policy application within the “contestability period.”  This term refers to the period during which an insurance company can deny a claim based on material misrepresentations made in the policy application.  Our Miami insurance law firm has successfully represented policyholders by establishing that non-disclosures or mistakes on an application were not material.  If the information would not have affected the decision by the insurer with regard to policy issuance, premium amount or the policy limit, the error or omission is not material.

While our Florida insurance law firm has successfully represented beneficiaries both in and out of the courtroom, many people assume they cannot prevail, so they accept an insurance company’s denial of a valid claim.  If you have questions about Florida life insurance claims, you are welcome to contact my Florida insurance claims dispute law firm.  My law firm represents policyholders in claims disputes in Miami and throughout Florida.  The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations.  No Recovery, No Lawyer Fees.  Call 305-461-1095 or Toll Free 1-866-71-CLAIM.

Be the first to comment!
Post a Comment