If you have taken the time to tune in to any of our previous blog articles on life insurance claims, you may have realized by now that there are a whole host of pitfalls that one may come across when attempting to claim a payout as a beneficiary to a life insurance policy. Life insurance providers are in the business of making money after all, so they will try to adhere to certain limitations and restrictions as much as possible. One restriction in particular that can be very tricky to navigate around is the timeline for coverage versus death of the policyholder. To be clear, many policies do have an automatic termination date. On the other hand, some may not terminate until an adverse action causes the policy to terminate. We will try to cover both scenarios in this blog post in hopes of providing some guidance.
In the first scenario, a common situation occurs when a policyholder’s death and the termination of the policy are very close in time. For example, a policyholder might take out a term life insurance policy. This type of policy will start and end on preset dates as provided in the policy documents. Now imagine a scenario in which a policyholder is in his or her dying days due to age or an illness. If the policyholder outlives the termination date, a beneficiary would not be able to make a valid claim. If the policyholder dies before the termination date, a beneficiary can make a valid claim. While we do not condone rushing a family member’s death along to guarantee a payout, there are situations where the timeline of death and termination date are extremely close. Even down to the minutes and a payout might be determined by the date and time a declaration of death is made. Medical staff in a hospital will not be able to wiggle around timestamps just to help you out, so you may end up with some more or less favorable outcomes depending on which side of the timestamp you fall.
The next scenario would be for a policy where the death timeline really is not a factor in regards to contract’s preset termination date. This scenario is more likely to come about when an event happens, such as a missed premium payment, that might cause the policy to terminate. Some policies have some leeway that allows you to get the policy back in good standing by paying a late fee and the original premium amount. Other do not allow for any missed payments. That being said, what if the policyholder’s death occurs around the time a payment is due and the premium is never paid. This can lead to some tricky situations for all parties involved as the death, payment, beneficiary claim filing and policy cancellation dates will all be in question.
Regardless of the situation you find yourself in, such a tricky timeline scenario should be resolved with the assistance of a qualified and experienced legal team. When you are faced with a situation similar to the described above, be sure to contact our office to get the legal representation you need and deserve.
If you have a delayed or denied life insurance claim, our life insurance attorneys will recover the full amount of the policy.