Our life insurance law firm recently recovered $104,250 in life insurance proceeds after AuguStar Life Insurance wrongfully denied a valid claim. The insurer initially relied on a loosely worded exclusion that did not align with the actual facts surrounding the insured’s death. After a comprehensive policy analysis, claim file review, and focused legal pressure, the denial was overturned and the full benefit was paid.
This case is another clear example of a broader pattern we see across the industry. Life insurance companies frequently deny claims based on exclusions that are poorly defined, improperly applied, or never meant to bar coverage in the first place. Many of these denials collapse once the policy language and underlying facts are examined closely.
Why Lesser Known Policy Exclusions Cause So Many Denials
Life insurance policies often contain exclusion sections that policyholders never fully review and beneficiaries never see until a denial letter arrives. These provisions are usually written broadly and placed deep within the policy. Insurers depend on that complexity and on the assumption that beneficiaries will not challenge the interpretation.
In the AuguStar Life dispute, the insurer attempted to stretch an exclusion beyond its intended scope. Once the exclusion was analyzed in context and compared against the medical and factual record, it became clear the denial was unsupported.
Undisclosed Activities and Hobby Based Denials
One of the most common tactics insurers use involves alleged nondisclosure of so called high risk activities. Applications often ask vague questions about hobbies or lifestyle without defining what qualifies as hazardous. Insurers later argue that activities such as recreational scuba diving, off road motorcycling, private aviation, or similar pursuits should have been disclosed.
In many cases, the insured did not regularly engage in the activity, did not view it as high risk, or answered the application question accurately based on its wording. Even more problematic, insurers sometimes deny claims when the death had nothing to do with the activity they now claim was omitted.
Courts frequently reject these denials when the questions were unclear or when the alleged omission had no bearing on underwriting or the cause of death. In the AuguStar Life case, the insurer attempted to rely on an exclusion without proving materiality or relevance.
Suicide Exclusion Period Abuse
Most life insurance policies include a suicide exclusion during the first one to two years of coverage. While this exclusion exists, insurers often misuse it by labeling ambiguous deaths as suicide even when the evidence does not support that conclusion.
Deaths ruled accidental, undetermined, or medically complex are often subjected to aggressive post claim investigations if they occur during this early period. Insurers search for circumstantial indicators rather than clear proof. When those indicators are weak or speculative, the exclusion should not apply.
Many suicide based denials fail once medical records, autopsy findings, and investigative reports are reviewed objectively. Insurers still issue denials knowing that many families will not challenge them.
Misrepresentation Allegations During the Contestability Period
The contestability period gives insurers the opportunity to review the application after a death occurs. During this time, insurers often look for any discrepancy to justify rescinding the policy.
However, not every error or omission qualifies as material misrepresentation. Insurers must prove that the information would have affected the issuance or pricing of the policy. Minor inaccuracies, misunderstood questions, or unrelated medical history often do not meet that standard.
In many cases, insurers approved the policy without follow up questions, medical exams, or additional underwriting. When that happens, courts often find the insurer waived its right to later complain about information it chose not to investigate.
Criminal Conduct Exclusions Are Often Misapplied
Another commonly abused exclusion involves alleged criminal conduct. Insurers sometimes deny claims based on unproven accusations, minor infractions, or situations where the insured was merely present during an incident.
To apply this exclusion, insurers generally must show that the insured was actively committing a serious criminal act and that the act directly caused the death. Mere suspicion, association, or disputed allegations are usually not enough.
Many criminal conduct denials unravel once the actual police records, toxicology results, and witness statements are examined carefully.
What To Do Immediately After a Life Insurance Denial
When a denial letter arrives, the steps taken in the first few weeks can determine whether the claim is recoverable.
Beneficiaries should obtain the complete policy, the original application, and the insurer’s full claim file. The denial letter should be reviewed line by line to identify exactly which exclusion or provision is being relied upon.
It is critical not to provide additional statements or documentation to the insurer without understanding how that information may be used. Insurers often request follow up information to strengthen their denial position rather than reconsider it.
Timing also matters. Certain denials are tied to strict contractual or statutory deadlines, and delay can limit legal options.
How We Recovered the $104,250 AuguStar Life Benefit
In this case, our attorneys analyzed the policy language in detail and compared it to the factual and medical record. We identified multiple flaws in how AuguStar Life applied the exclusion and demonstrated that the denial did not meet the legal requirements for rescission or exclusion enforcement.
Once the insurer was confronted with those deficiencies, the denial could not be sustained. The claim was reversed and the full $104,250 benefit was paid to the beneficiary.
Life Insurance Denials Are Often Negotiation Positions, Not Final Decisions
Despite how denial letters are written, many life insurance denials are not legally sound. Insurers rely on complexity, emotional exhaustion, and lack of legal knowledge to avoid payment.
With proper legal review, a significant number of denied claims are overturned, settled, or paid in full without prolonged litigation. Exclusions must be applied narrowly, fairly, and in accordance with the policy language and governing law.
Our firm handles denied life insurance claims nationwide and works on a contingency basis. There is no fee unless we recover benefits. If your AuguStar Life claim or any life insurance claim has been denied based on exclusions, misrepresentation, or cause of death disputes, legal review is often the key to recovery.