What are some common reasons for denials of life insurance claims?
Lapse in Payment: Insurance companies will routinely deny a claim if there has been a lapse in payment. However, the insurance company has a duty to provide notice on a timely basis to the address indicated on the policy. If you sent your payment, the mistake might be a processing error by the insurance company. Sometimes policyholders make their premium payment to their agent who fails to forward the payment to the insurance company. If the insurance company has an established practice of accepting past due payments or the policy or state law provides a grace period, you might be able to contest a denial on this basis. The better practice to to set up your account to auto pay.
Denial During the Contestability Period: Life insurance companies have a much stronger position when they deny claims during the first two years of the policy period. This period of the policy term is referred to as the “Contestability Period”. The insurance company will carefully scrutinize all information provided in the policy application during this period. Any discrepancy regarding weight, age, job history, pre-existing medical conditions and more might be used to rescind (cancel) the policy. If the insured dies during this period, the insurance company will routinely pour through the insured’s medical records and other documents looking for a basis to deny the claim. If you are the beneficiary under a policy and the decedent dies during the first two years of the coverage period, you should obtain legal advice before the insurance company starts its fishing expedition.
Lowball Settlements: Sometimes life insurance companies will engage in the unethical practice of offering a beneficiary less that the value of the benefits under the policy. The insurer might cite “irregularities” in the application or simply try to monopolize on the grief and financial pressure of the beneficiary. When a life insurance company tries to persuade a beneficiary to accept less than the benefits promised under a policy, an insurance claims attorney can evaluate the policy and protect the interest of the beneficiary.
Material Misrepresentation: The process of completing an insurance application should never involve estimates, guesses or subtle fudging of the facts. Life insurance companies will carefully review the application for errors, misstatements, or omissions that might be exploited to deny a claim and/or rescind the policy. Claims that an insured lied or omitted information can be the result of a question or response merely being ambiguous. The alleged error in the application also might not be material if the information would not have impacted the decision to issue the policy and would not have affected the premium.
Denial of Accidental Death Benefits: Insurance companies often employ a strategy of paying the face value of the policy while denying the accidental death benefit. The question of what constitutes an accidental death can be complicated based on the language of the policy.
You can reach Miami 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].
