People obtain life insurance policies as part of financial planning for their loved ones’ future.

Life insurance protects those who rely on the insured’s ongoing financial support and will suffer in the event that this support is withdrawn. Ideally, the insurer will pay the full policy amount after the insured’s death. Unfortunately, this does not always happen. Large insurance companies routinely deny life insurance claims for various reasons leaving life insurance beneficiaries in difficult circumstances.

In this article, our lawyers explain what happens when the insurance company denies your life insurance claim and what you should do. If your claim has been denied, call us at (888) 510-2212 for a free case evaluation.

What Happens if a Life Insurance Claim Is Denied?

If a life insurance claim is denied, the insurance company will send the beneficiary a letter explaining the reasons for the denial. The letter will usually quote policy provisions that apply and will list documents the insurer reviewed in making the decision to deny.

Sometimes, beneficiaries’ claims are denied on the phone. If this has happened to you, you have the right to ask for a denial letter (in writing). A denial letter not only outlines important information needed to dispute the denial but it will also show the date the decision was made, which will help identify the timeline for filing a lawsuit. Finally, a denial letter may outline an appeal procedure. 

In some cases, insurers refuse to allow beneficiaries to file a life insurance claim. Usually, this is done on the phone. The reasons could be:

• “The policy has lapsed, and there is no coverage”;
• “The death was not accidental, and there is no coverage because this is an accidental death policy”;
• “You cannot file a claim because you are an ex-spouse”;
• “Your group coverage terminated because you left your employment”.

Very often, insurance company representatives who verbally deny your right to file a claim make mistakes and disallow perfectly valid claims. When a life insurance company’s representative tells you on the phone that you cannot file a claim, always consult a life insurance lawyer.

Reasons Why Life Insurance Claims Get Denied

The reasons behind life insurance claim denial may vary depending on the policy provisions, state and federal laws, and specific circumstances of an individual whose claim is denied. Below we have outlined the most common excuses life insurance companies use in denying claims:

• Denial for failure to reinstate;
• Life insurance lapse/policy cancellation due to a missed payment;
• Denial for failure to provide complete information on the application;
• Denial for failure to disclose immaterial pre-existing medical condition;
• Denial for failure to disclose a regular medical check-up;
• Denial under the two-year life insurance contestability clause;
• Denial for misrepresentation regarding age, employment and/or income;
• Denial for misrepresentation regarding weight;
• Denial based on alcohol use;
• Denial based on drug use;
• Denial due to a sickness / medical treatment exclusion;
• Denial for material misrepresentation on the life insurance application;
• Denial for misrepresentation regarding criminal history;
• Denial of accidental death claim based on independent medical condition;
• Denial of accidental death claim based on death not occurring within a specific time/date;
• Denial based on an exclusion in the life insurance policy;
• Denial based on suicide;
• Denial based on self-inflicted injury;
• Denial based on the presumption of death due to disappearance;
• Denial based on death in a foreign country;
• Denial for failure to provide evidence of insurability;
• Denial based on prescription drug misuse;
• Denial based on termination of employment;
• Denial based on the change in employment status;
• Denial based on employer’s change of insurance providers;
• Denial based on failure to convert employment coverage to individual policy;
• Denial based on failure to port coverage;
• Denial based on the employer’s failure to maintain or forward documents to the appropriate department;
• Beneficiary dispute;
• Beneficiary contest.

Our attorneys go into detail about each of these situations in our article about reasons life insurance will not pay out.

Contestability Period: Why Does It Matter in Life Insurance Claim Denial?

Claims are routinely denied if the policy is less than two years old and is subject to contestability investigation. The contestability period is when the insurance company investigates the answers provided on the application to ensure they are supported by the insured’s medical records and background information. Life insurance claims denied due to contestability can be appealed if the insurance company wrongfully denied the claim.

Read more on our blog post about the contestability period.

How Do You Fight a Life Insurance Claim Denial?

Once the life insurance claim is denied, many family members get demotivated and some may even give up pursuing the benefit further. However, it is within their rights as life insurance beneficiaries to fight the life insurance claim denial by filing a complaint or an appeal if they disagree with the denial reason. Even if the insurance company upholds the denial on appeal, you should contact an attorney to fairly evaluate your case and your chances of winning.

Here are the steps you should take in case your life insurance claim was denied:

1. Contact the Life Insurance Company

If the insurance company makes a determination to deny a claim, the denial letter they send to the person who filed the claim needs to be specific and outline the exact reasons for denial.

Unfortunately, far too often, insurance companies send vague denial letters that simply state that the claim is not going to be paid without giving specific reasons for the denial. If that is the case, you should contact the insurer and demand detailed reasons for the denial. 

Make sure you inquire about the appeal process as well. They should tell you if the policy allows it and what you need to know to file an appeal. You will need to provide additional documentation, such as medical records, an autopsy report, or insurance payment receipts to support your appeal. 

In some cases, the denial letter may refer to a certain statute or a legal theory that renders the claim not payable. If this is the case, a life insurance lawyer will evaluate whether the referenced law is applicable.

2. Contact a Life Insurance Lawyer to Appeal the Denied Claim

You need to work with an attorney who handles life insurance cases to improve your chances of recovering the life insurance death benefit. A life insurance lawyer working on your case will know what law controls your claim and how to appeal the denial legally.

Disputing a denied life insurance claim involves a claim denial investigation, gathering supporting documents, conducting legal research, and filing an appeal. This process is controlled by a set of regulations that must be followed strictly.

For example, an ERISA claim denial requires that an administrative appeal be filed within a certain period following the denial letter. Since the documents gathered and the issues raised on appeal will subsequently be reviewed during litigation, it is important to conduct a thorough investigation and legal research before filing an appeal.

Further, many life insurance claims may involve the interplay of several state and federal laws, various policy provisions, and court documents. In such cases, a life insurance lawyer will help design a successful appeal strategy and sort out possible outcomes of the case.

Many insurance companies allow an administrative appeal before the person whose claim was denied files a lawsuit. To file a successful administrative appeal, your life insurance lawyer will present a convincing argument based on the facts of the case supported by the laws governing it. It is a crucial step in getting a denied claim paid.

If you feel your life insurance claim was denied or delayed unfairly, speak with an attorney who handles life insurance matters. An experienced attorney will advise you on how to proceed after a denied life insurance claim, which may involve filing an appeal, a contest, or a lawsuit to receive the money you deserve.

How Our Lawyers Can Help Appeal Denied Life Insurance Claims

At our law firm, our attorneys handle claims that have been denied for all the reasons listed above. They have extensive experience with complex appeals procedures and litigation and have a high success rate in recovering life insurance benefits our clients were rightfully entitled to.

We offer free consultations and work on a contingency fee, so there is no legal cost unless you win and receive your life insurance payout. If you or someone you know has issues with a denied life insurance claim, call us at (888) 510-2212 to speak to one of our lawyers. We offer free consultations.

Here are just a few case examples involving denied life insurance claims that our attorneys have handled:

• We recovered $100,000 after appealing a denied claim due to a lapse in policy;
• We helped a client collect $1 million after their claim was denied claim due to lapsed policy during the contestability period;
• Denied claim due to waiver of premium;
• Our client received $550,000 after appealing a denied claim due to material misrepresentation on the policy application form;
• Our client received $1 million after fighting a denied claim due to beneficiary dispute in a murder-suicide case.