Most people look at life insurance as a fail-proof safety net, something their family can always count on if the worst happens. However, in some cases, life insurers may reject an insurance claim due to several legal loopholes.
Unlike homeowners insurance, life insurance does pay out the majority of the claims. So when might a life insurer deny your claim? Peter Dyson, a life insurance policy lawyer in Delray Beach, Florida, discusses common reasons for life insurance claims denials.
Failure to Disclose Potential Risk Factors or Medical Conditions
When someone applies for life insurance coverage, they often must disclose any existing medical conditions and potential risk factors.
Typically, a life insurance policy requires applicants to disclose the following information:
- Medical history, including present physical and mental health conditions, family health history, and medical treatment history
- Risky behaviors, such as dangerous driving, criminal records, and tobacco use
- Risky hobbies, including skydiving, mountain climbing, or car racing
- Hazardous occupations, such as construction, law enforcement, or active military service
Concealing relevant information while applying (also known as “material misrepresentation”) may lead to a denial of the life insurance claim later. Unscrupulous insurers may try to use even minor omissions to deny a claim, particularly if the death occurred during the policy contestability period.
Failure to Pay Life Insurance Premiums
Sometimes, beneficiaries who file a claim discover that the insured family member did not pay their insurance premiums in full before death.
Depending on the insurance company and the number of missed payments, it may be possible to reinstate a lapsed life insurance policy by paying any past-due premiums plus interest. However, it is unwise to allow an insurance company an opportunity to deny a claim. Insured individuals should keep up with premiums to make sure their family doesn’t lose coverage.
Outliving Term Life Insurance
Many people have term life insurance, which means that the insurer will pay benefits only if the policyholder passes away within a pre-defined period. If the policyholder outlives the policy’s term, the insurer won’t pay death benefits.
It may be possible to renew the policy when the term ends to keep life insurance coverage, though the premiums will almost always be higher. It may also be possible to convert the policy to permanent life insurance within a specific time window.
Death Due to Reasons Not Covered By An Insurance Policy
A life insurance policy may not cover specific death causes, like suicide, death during childbirth, or death in a natural disaster. Insurers will also withhold benefits if the policyholder was murdered and the beneficiary was involved in the homicide.
Additionally, beneficiaries are unlikely to collect payout if the policyholder died due to using alcohol or prohibited substances.
This specific reason for denying life insurance claims may often involve disputes that are hard to resolve without litigation. For instance, an insurer may state that the policyholder committed suicide while the family has evidence to the contrary.
An Employer’s Lack of Compliance With Group Insurance Terms
Employees often participate in group life insurance coverage through their place of work. In these cases, the employer or HR department is responsible for providing accurate information about the coverage and making sure workers comply with the policy’s terms.
Unfortunately, many employees never personally review the terms of their coverage, which may lead to misunderstandings about eligibility requirements, premiums, or necessary documentation. As a result, employees and their dependents may lose coverage without even being aware of it.
ERISA (Employee Retirement Income Security Act) can often help appeal employee group life insurance claim denials.
How Can a Life Insurance Lawyer Help With My Claim?
The authoritative tone of a life insurance claim denial may make beneficiaries believe they have no choice but to give up the claim. However, in many cases, a knowledgeable life insurance lawyer may appeal an unlawful denial.
At Dyson Law, we have helped clients all over South Florida recover millions of dollars through settlements and trials.
Our law firm offers:
- Personalized representation
- Strong litigation skills
- Honest, transparent case evaluations
- Constant communication with each client
- “No Fee Unless You Win” policy
Negotiating with an insurance company can feel overwhelming while you grieve the loss of a family member. Our life insurance policy lawyers can handle all necessary communication and protect your rights during this difficult time.
Dyson Law: Your “South Florida Insurance Attorney Near Me”
If you had counted on the financial support of a life insurance policy after the death of a loved one, a denied claim might be a devastating blow. Our experienced life insurance attorneys can review your case, fight against an unlawful denial, and help you recover benefits.
Did an insurer deny your life insurance claim? Are you looking for a “life insurance attorney near me?” Contact us at Dyson Law at (561) 498-9979 in Delray Beach, Florida, today for a free consultation with South Florida’s top life insurance lawyers.
Copyright © 2021. Dyson Law, PLLC. All rights reserved.
The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.