3 Frequently Asked Questions About Life Insurance Claims

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

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.  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?

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 life insurance company has the right to obtain and review medical and other records to determine that the insured did not make a material misrepresentation when applying for the policy.  

Will an innocent mistake or omission in the application for insurance result in a denial of the claim?

The insurance company has the burden of proving that any misrepresentation in the application for insurance is material to the acceptance of the risk (issuance of the life insurance policy).  The precise meaning of the term “material misrepresentation” may vary slightly based on state law.  Generally, a misrepresentation will not justify denial of the insurance claim unless it is material, that is, unless the information would have impacted the decision to issue the policy or would have resulted in the insurance company charging a higher premium for the policy.

What happens if your life insurance policy lapses because you 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.

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].

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