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protects those who rely on the insured’s ongoing financial support and will suffer in the event that this support is withdrawn.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 life insurance company will pay the full policy amount after the insured’s death. Unfortunately, this does not always happen. Life insurance claims get routinely denied by large insurance companies for various reasons.
In this article, we’re going to explain what happens when the insurer denies your death benefits and how to appeal and win a denied life insurance claim. Here’s what you need to know.
Life Insurance Claim Process
Usually, there a certain deadline by which you have to file for benefits but once you have followed the procedure and submitted a claim for your death benefits, there are three ways things could turn out:
Your Claim Is Approved
Generally, the insurance company should pay a claim within 30 days from the time all the required documents are submitted.
If you file a claim for life insurance or accidental death benefits, the insurer will need such documents as a copy of the death certificate, medical examiner’s report, autopsy report, police report, toxicology report, authorizations to release medical records, etc.
Once all the records are received the insurer will pay a claim within the next 30 (thirty) days.
Your Claim Is Delayed
A claim that is not paid within 30 (thirty) days from the time all the necessary documents are submitted is delayed.
A claim delay may last from several months to several years depending on the reasons behind the delay. It is not unusual for an insurance company to delay paying a claim for several years. Fighting a delayed life insurance claim should not be a do-it-yourself project and should always involve the assistance of a life insurance attorney.
If a claim is not paid, you need to inquire into the reasons behind the delay. It usually means there is a problem with processing the claim and you may need legal counsel to make sure your claim is not eventually wrongfully denied.
Your Claim Is Denied
When the insurance company makes a determination to deny a claim, it will send a denial letter to the beneficiary or the person who filed the claim. The denial letter needs to be specific and outline the exact reasons for denial.
Reasons Why Life Insurance Claims Are Denied
The reasons behind denied life insurance claims 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 application
- Denial for failure to disclose immaterial pre-existing medical condition
- Denial for failure to disclose a regular medical check-up
- Denial for misrepresentation on the life insurance application
- 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 omitting information 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 specific time/date
- Denial based on an exclusion in the policy
- Denial based on suicide
- Denial based on self-inflicted injury
- Denial based on 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 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 employer’s failure to maintain or forward documents to the appropriate department
- Beneficiary dispute
- Beneficiary contest
We can work with you to evaluate your case and help expedite the payment on a denied life insurance claim. We have successfully handled all the situations above for life insurance beneficiaries. Call 888-512-2212 and get a free consultation.
Here are just a few case examples involving life insurance claim denials that our attorneys have handled:
- Denied claim due to lapsed policy
- Denied claim for ex-spouse (with no explanation)
- Denied claim due to failure to pay premiums
- Denied claim due to policy lapse due to non-payment of premium
- Denied claim due to a lapse in policy – We recovered $100,000 after the appeal
- Denied claim due to lapsed policy during the contestability period – We recovered over $1 million for our client
- Denied claim due to increased policy premium lapse
- Denied claim due to waiver of premium
- Denied claim due to material misrepresentation on application & Delayed AD&D Claim due to Sickness Exclusion – We recovered proceeds in the amount of $550,000
- Denied claim due to material misrepresentation
- Denied claim due to beneficiary dispute in a murder-suicide case – We recovered over $1 million for our client
- Denied claim due to beneficiary dispute due to beneficiary change
What To Do If Your Life Insurance Claim Has Been Denied: Filing an Appeal
Once the claim is denied, many family members get demotivated and some may even give up further pursuit of the benefits they are entitled to. However, it is within their rights as life insurance beneficiaries to file a complaint or appeal the decision if they disagree with it. 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 claim to life insurance benefits was denied:
Contact the Life Insurance Company
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 denial. If that is the case, you should contact the insurer and demand detailed reasons for 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.
Appeal the Denial of Life Insurance Benefits
Once you receive the denial letter, you can either retain a life insurance attorney who will handle the whole process of appealing the denied life insurance claim or you can file an appeal on your own.
1. File an appeal on your own
If you decide to file an appeal on your own, you need to be aware of the deadlines, laws and appeal rules. FIling an appeal on your own may certainly be less expensive than hiring a life insurance lawyer, but it is important to remember that appeals are still legal processes. Unless you have the required knowledge, filing an appeal on your own can easily become a time-consuming and stressful situation to deal with while you are still grieving. In addition, in some cases, an improperly filed appeal may limit causes of action your attorney will need to raise in a lawsuit if your appeal is denied. We recommend consulting a life insurance attorney when faced with a life insurance appeal.
2. Contact a Life Insurance Lawyer to dispute the claim
In order to successfully appeal a denied life insurance claim, you need to work with an attorney who specializes in this area of law. 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 claim denial investigation, gathering supporting documents, conducting legal research and filing an appeal. This process is controlled by a set or 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 specializing in life insurance. 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.
Our Life Insurance Lawyers Can Help File and Win Your Appeal
At our law firm, our attorneys handle claims that have been denied for a variety of reasons. They have extensive experience with the complex appeals procedure 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.