Life insurance claims can be denied for several reasons, often related to the terms of the policy, the circumstances of the death, or issues with the application process. Some common grounds for denial include:
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Material Misrepresentation: If the insured person provided false information on their application, especially regarding critical issues like health conditions, smoking status, or risky hobbies, the insurer might deny a claim. Misrepresentations can lead to the insurer contesting the policy if discovered within the contestability period, typically the first two years after the policy is issued.
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Lapsed Policy: If the policyholder failed to pay premiums, leading to the policy lapsing or being terminated before the insured's death, the insurer could deny the claim. Some policies have a grace period for late payments, but once this period passes without payment, the policy might be void.
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Exclusions Specified in the Policy: Life insurance policies often have exclusions that specify circumstances under which a death benefit will not be paid. Common exclusions include suicide within the first two years of the policy (one year in some jurisdictions), death during the commission of a crime, or deaths resulting from certain risky activities or hobbies.
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Contestability Period: If the insured dies within the contestability period, the insurer has the right to scrutinize the application for any inaccuracies or misrepresentations. If discrepancies are found, the claim may be denied.
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Lack of Insurable Interest: At the time of application, the policy owner must have an insurable interest in the life of the insured. This means there must be a legitimate reason for purchasing the policy, typically a financial or familial relationship. If insurable interest is questioned or nonexistent, the claim could be denied.
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Failure to Disclose Relevant Information: This is similar to material misrepresentation but covers omissions, where the insured fails to provide relevant information that would have influenced the insurer's decision to issue the policy.
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Policy Exclusions for Certain Causes of Death: Beyond common exclusions like suicide or risky activities, some policies might have specific exclusions for deaths caused by acts of war, certain natural disasters, or specific medical conditions.
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Death Occurring in a Geographic Location Not Covered: Some policies have geographic limitations, and if the insured dies in a region not covered by the policy, the claim might be denied.
When a claim is denied, insurers usually provide a detailed explanation of the reasons for the denial. Beneficiaries have the right to appeal the decision if they believe the claim was wrongly denied. It's also advisable to consult with an experienced life insurance claim lawyer to explore possible actions to contest the denial.
You can reach Life Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected] or by text at (305) 929-8935.
