An experienced and knowledgable Miami life insurance claims attorney answers several Frequently Asked Questions about Life Insurance policies in Florida.

J.P. Gonzalez-Sirgo
Founder of J.P. Gonzalez-Sirgo, P.A.

When a claim for life insurance proceeds is denied by the insurance company, the denial can be a serious cause for concern.  Life insurance policies are frequently purchased to provide financial security for surviving loved ones if a family breadwinner passes away.  Because life insurance proceeds may be a fundamental part of an estate plan, the delay or denial of a death benefit can be financially devastating for family members.  As an experienced former insurance claims adjuster, my background allows me to anticipate the excuses that a life insurance carrier might employ to avoid paying the money beneficiaries are entitled to receive under a life insurance policy.  This blog provides answers to frequently asked questions we receive about life insurance claim-related issues.

Can a life insurance company refuse to pay a death benefit if the premiums have been paid for many years?

Generally, a life insurance company can only deny a claim by beneficiaries following the insured’s death within the first two years of the policy.  This two year period is referred to as the contestability period.  When an insured dies during the contestability period, the insurance company has the right to obtain and review medical records to determine that the insured did not make a misrepresentation when applying for the policy.  When an insurance company denies a claim, misrepresentation by the insured during this period constitutes the most common basis for the denial.

Will an innocent minor mistake or omission during the contestability period definitely result in a denial?

The insurance company has the burden of proving that the misrepresentation is material.  The precise meaning of the term “material misrepresentation” may vary slightly based on state law.  Most life insurance policies include language indicating that all descriptions and statements in an application are representations rather than warranties.  This language is included so that the insurance company can contend even innocent misrepresentations justify a denial.  Generally, a misrepresentation will not justify denial of the insurance proceeds unless the information would have impacted the decision to issue the policy or would have resulted in the insurance carrier providing less coverage.

What happens if my life insurance policy lapses because I forgot to pay my premium?

Most life insurance policies provide a 31-day grace period to pay an overdue premium before coverage lapses.  When the insured fails to make the payment before the grace period expires, this will result in cancellation of the policy.  If the policy is a whole life policy with an accrued cash value, the company will apply funds comprising the cash value toward premiums until the cash value is exhausted.  If the cash value runs out, the policy will lapse.

What can invalidate life insurance coverage?

The two key exclusions that can result in non-payment of a death benefit are suicide and material misrepresentations.  The suicide exclusion in intended to prevent people from fraudulently purchasing a policy with the intent to take one’s own life, so surviving family members receive a large payout.  The material misrepresentation exclusion is designed to prevent applicants from failing to disclose major factors that impact the underwriting process.  For example, a person who has a cancer diagnosis might fail to disclose this condition to avoid being denied coverage.

If you are the beneficiary of a life insurance policy, I invite you to contact my law firm with questions about death benefits.  I am an experienced Miami life insurance claims attorney who handles disputed claims 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.

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