Life Insurance AD&D Claim Denials
When a life insurance claim is denied, you may not know where to turn for help. The insurance company will likely send an official and credible sounding notice explaining why you’re not entitled to benefits, and probably won’t be swayed if you call to question the denial. But, with the help of an attorney experienced in life insurance benefits denial cases, you may be able to claim the full benefits available under the policy.
Reasons Life Insurance Claims are Denied
Life insurance claims are denied for a variety of reasons, some valid, some in error and some in bad faith. However, a handful of justifications account for a large percentage of claims. The most common reason that insurance companies provide for denying life insurance claims is that the insured made a “material misstatement” in his application.
Material Misstatements and the Contestability Period
The issue arises most frequently if the insured dies within two years of obtaining coverage. The first two years are known as the “contestability period.” If the insured dies during that time, the insurance company has the right to review the information provided by the insured and other evidence and deny claims if a material misstatement is discovered. This includes the ability to access the insured’s medical records and search them for information that does not match the application.
Cause of Death Not Covered by the Life Insurance Policy
This justification for denial of benefits frequently arises in connection with an Accidental Death and Dismemberment (AD&D) policy. Unlike most life insurance policies, an AD&D policy pays out under very limited circumstances—namely, when the insured is killed or dismembered in an accident. It seems that the determination as to whether or not a death was accidental would be straightforward, but an insurance company looking for a reason to deny coverage won’t necessarily see it that way.
For example, the insurance company will often deny coverage if it believes it can make a case that the cause of death was suicide rather than an accident. Though a standard life insurance policy would have to pay benefits after a death by suicide so long as the policy had been in force for more than a year, the test is different for an AD&D claim. Suicide is intentional. An intentional act is not an accident.
That doesn’t mean, however, that a determination by the insurance company that the cause of death was suicide will prevent you from collecting benefits. The insurance company is not the ultimate decision-maker with regard to cause of death.
Fighting for Your Life Insurance Benefits
Each of the two examples above provides an illustration of how an insurance company may deny benefits, but that denial may not hold up to legal challenge.
If an insurance company states that a life insurance claim has been denied due to a material misstatement by the insured, that claim requires further investigation. Even if the insured did make a mistake in the application or omit information, that information will not necessarily be considered “material” from a legal standpoint. Insurance companies know this, but they also know that most individuals don’t know it, and that many won’t ever challenge the decision.
Similarly, an insurance company’s declaration that suicide was the cause of death does not control. If the beneficiary challenges the determination, the burden will fall on the insurance company to prove that the cause of death fell outside the terms of the policy. The same principle applies to each of the common reasons life insurance claims are denied.
Get Help from an Experienced Life Insurance Claims Denial Attorney
When an insurance company denies a valid claim for life insurance benefits, the company knows that most beneficiaries won’t fight back. The company also knows that even if a beneficiary pushes back, he or she probably won’t have sufficient legal knowledge or resources to force the company to pay. When you hire an attorney who has a strong history of representing beneficiaries in life insurance denial cases, you take that power out of the hands of the insurance company and level the playing field.
If you’re ready to pursue the benefits you deserve, schedule a free consultation today.