If a loved one has recently passed away, there is a good chance that you and your family are in need of funds from a life insurance policy to help cover necessary expenses, such as funeral and burial costs. Unfortunately, the process of filing a life insurance claim and recovering the money you need isn't always easy, nor is it often timely. Furthermore, there are several common mistakes made both before and during the claims process that can result in a delayed or even denied claim. Sadly, thousands of life insurance claims are denied in the United States each year. By being careful to avoid these mistakes, in addition to having an attorney on your side, you can increase your chances of a fair recovery.
You Didn't Disclose Certain Information
Being honest when filling out a death benefits claim will go a long way in avoiding headaches down the road. Failing to disclose certain information, either in the initial application for a life insurance policy or in your claim, can result in a denial. This can include intentional omission or misrepresentation of facts or outright falsification. A clearly accidental error (such as writing down the wrong driver's license number), on the other hand, should not be held against you or your loved ones.
The Cause of Death Wasn't Covered
In some cases, the reason for a denial will be as simple as the life insurance policy coverage limits. What many people fail to realize when they purchase a life insurance policy is that not all types of death are automatically covered. For example, some policies may not include coverage for deaths occurring during certain activities that are known to be dangerous, such as sky-diving. This is why it's so important to shop around and read the fine print when choosing a life insurance policy.
There Was a Contestability Dispute
All life insurance policies have what's known as a contestability period, which is usually around two years following the date of purchase. During this period, if the policy-holder passes away, the insurance company can launch an investigation into the life insurance application and other details to ensure that nothing was falsified or omitted. This can often result in a claim delay, but if problems are discovered with your claim or the initial application during this time, your claim could be outright denied.
The Life Insurance Policy Lapsed
If the life insurance policy on which you're attempting to make a claim lapsed at any point during the coverage period, there is also a good chance that the claim could be denied. For this reason, it is recommended that automatic payments be set up so as to avoid a cancelation. Some companies also have grace periods in place to help policy-holders out for this reason.
These are just a few of the most common reasons as to why a life insurance claim could be denied. If your claim has been delayed or denied, you're encouraged to seek legal representation from an experienced and reputable life insurance attorney. This way, you can get the help you need to appeal your claim denial and work towards receiving the funds you may deserve.