Denied Life Insurance Claims & Delayed Life Insurance Claims
Many life insurance policies are paid out as agreed, but that isn’t always the case. When a life insurance company wrongfully denies a claim or unreasonably delays making a determination regarding life insurance benefits, you have options.
Life Insurance Law Protects Insureds and Beneficiaries
Life insurance law contains many provisions governing the actions of insurance companies. Some portions of these statutes place restrictions on life insurance companies. For example, a life insurance carrier cannot deny benefits because the insured committed suicide unless that suicide took place within one year of purchasing the policy.
Delay of Life Insurance Benefits
Other provisions impose affirmative obligations on the insurance carrier. One important provision requires the insurance company to complete the investigation of a life insurance claim within 30 days. (Note, however, that the 30-day clock starts running when the insurance company receives notice of the claim, not upon the death of the insured or issuance of the death certificate.) There is an exception for situations in which the insurance company cannot reasonably complete the investigation within 30 days, but an insurance company can’t simply decide that it wants more than 30 days.
If the investigation is not complete and the insurance company is not ready to either approve or deny the life insurance claim within 30 days, written notice is required. That notice can’t just declare that the company needs more time—it must include an explanation as to why the investigation couldn’t be conducted in a timely manner. If the company is found to have unreasonably delayed the claim, it may have to pay you interest on the funds that were withheld during the “investigation.”
Many beneficiaries do not understand that this is a tactic that some insurance companies use to delay claims, and simply wait patiently as they get letter after letter claiming justification for the delay—or, don’t hear anything at all from the insurance company.
If you are the beneficiary of a life insurance policy or the representative of the beneficiary and the insurance company is dragging its feet, making excuses for taking a long time to review your claim or ignoring you completely, you do not have to remain at the company’s mercy. Get help from an attorney experienced in life insurance benefit delays and denials.
Denial of Life Insurance Benefits
Life insurance benefits may be denied for many reasons, some legitimate and some not. However, one reason accounts for the majority of life insurance disputes nationwide: supposed material misstatements.
A material misstatement takes place when the insured lies about something important in his application. In some cases, an honest mistake may still constitute a material misstatement, if the information is relevant to the policyholder’s insurability. However, insurance companies often attempt to deny life insurance claims on the basis of a material misstatement when the misinformation involved has no real bearing on the insured’s eligibility for coverage or his life expectancy.
Whether or not the insurance company succeeds in avoiding payment in this type of case depends entirely on the actions of the beneficiary. If the beneficiary accepts the insurance company’s denial and takes no further action, the claim is not paid and the insurance company reaps the benefits of having mischaracterized the inaccurate information. If the beneficiary tries to fight the insurance company alone, or with an attorney who is not experienced in handling denied life insurance claims cases, she may or may not receive benefits. The life insurance company may or may not profit from its mischaracterization.
However, if the beneficiary works with an attorney who is experienced in handling life insurance benefits denial cases, whether at the state level or through an employer plan that is governed by federal law, chances are very good that the beneficiary will receive the benefits due under the policy. And, of course, that means that the insurance company will get nothing for its attempt to mischaracterize the information except a lot of wasted time and a legal bill.
Contact a Life Insurance Claims Denial Lawyer Today
If you’ve received a life insurance benefits denial notice or the insurance company is stringing you along, not making a decision about your claim, it’s time to connect with an experienced advocate. Our life insurance lawyers have a significant record of success in recovering life insurance benefits after denial notices or unreasonable delay. You can start fighting back right now. Just schedule a free consultation.