Life Insurance Claims Can Derail Recovery
Confidence in life insurance is growing. From 2014 to 2015, the amount of money Americans spent on life insurance coverage increased by 13.2%. During the following year, the number of adults who said they’d recommend life insurance to others jumped from 55% to 66%.
Generally, that’s a good thing. Life insurance provides important protection for those left behind when a loved one dies—especially if that loved one was the breadwinner in a family or leaves behind young children. But, when an insurance company unreasonably denies a life insurance claim, the impact on the family can be devastating.
The Most Common Reasons for Life Insurance Claim Denials
The reasons listed here aren’t necessarily the most common reasons life insurance claims are denied. They are the reasons most commonly cited by insurance companies as the reason for denial.
- Material Misstatements: A material misstatement by the insured during the application process—something like concealing a medical issue—can serve as the basis for denial of a life insurance claim. This is the most common reason life insurance claims are denied. However, many of the misstatements cited as grounds for denial aren’t material at all, and the insurance company can often be forced to pay the claim.
- Lapsed Coverage: Another common reason life insurance claims are denied is that the insured allegedly failed to make payment. Sometimes it’s true that the policyholder missed a payment, while in other cases that payment may actually have been received during the grace period. In either case, we have had success in securing full payment of benefits.
- Cause of Death: Many life insurance policies provide coverage for specific causes of death. For example, an accidental death and dismemberment policy will not provide coverage if the insured dies peacefully in his sleep. And, most policies exclude coverage for suicide within the first year. However, cause of death may be open to dispute, as may the policy language. In some cases, cause of death denials are successfully disputed.
Regardless of the reason the insurance company offers for denial of coverage, it is in your best interest to investigate further. Remember that the insurance company doesn’t have the final say.
Denied Life Insurance Claims Create Financial Stress
When a person purchases a life insurance policy and makes premium payments, sometimes for many years, he or she expects that the intended beneficiaries will be cared for. Beneficiaries who have been dependent on the deceased in life, such as spouses and children, may be counting on that money for support during the difficult transition after the loss of a loved one.
When a life insurance claim is denied, the grieving family is forced to adapt and find new solutions on short notice, during a very trying time. Unfortunately, the search for solutions often overlooks the one that might be the most straightforward and beneficial: to take on the insurance company and challenge the denial of benefits.
Denied Life Insurance Claims Create Physical and Emotional Stress
Stress can make you sick. Symptoms associated with stress range from relatively minor complaints such as nausea and headaches to serious medical issues such as high blood pressure and heart attacks. A person who has recently lost a loved one is already under tremendous stress, and the shock of being denied life insurance benefits can aggravate that stress significantly.
With the emotional issues already in play and the obligations often placed on a loved one after an unexpected death, it’s no surprise that many beneficiaries whose life insurance claims are denied don’t feel up to fighting. That’s understandable, but it doesn’t mean that you should give up the benefits your loved one secured for you. A better option is to work with an attorney who can take the burden of fighting the insurance company off your shoulders and move your claim forward for you.
Contact a Life Insurance Benefits Denial Attorney as Soon as Possible
The sooner you speak with an attorney who has the knowledge and experience to handle life insurance claim delay and life insurance claim denial cases, the sooner you can reduce the stress you’re facing in this difficult time. Schedule a free consultation to find out how we may be able to help you secure life insurance benefits after your claim was denied.