Thousands of people purchase new life insurance policies every year. After they make a premium payment, purchasers desire immediate coverage. However, most life insurance companies do not authorize their agents and brokers who sell insurance policies to the public to make commitments which can only be terminated by an insurer when the premiums are not paid.
The responsibility for deciding whether to issue life insurance policies is usually vested in underwriters. They decide whether to accept an application, whether to issue an insurance policy for a certain amount of coverage and how much to charge for the coverage.
If an insured passes away prior to a life insurance policy’s effective date but after the first premium payment was made, the insurance company will likely deny the beneficiary’s life insurance claim. Generally, the application for life insurance must be approved before an insurance company accepts the insurance risk.
However, this is not the law in all states. Several states hold that temporary or interim coverage becomes effective when insurance companies collect premiums on the application date but do not explain to the applicant when the coverage will become effective and how the eligibility will be determined.
Kadetskaya Law Firm has won many administrative appeals after a major life insurance company denied a claim based on the alleged “inactive” status of a policy. The insureds who unexpectedly died before the effective date of the policy were never properly notified of any delay in coverage even though the insurance company accepted and processed the first premium payment.
With the help of our competent life insurance lawyers, insureds’ policies were reinstated and the claim denials reversed. If you find yourself in a situation where a life insurance company denied your claim based on inactive status, speak with a knowledgeable life insurance attorney at our firm.
Call us now at (888) 510-2212. Competitive contingent fees.