Having a life insurance policy is supposed to be a safeguard. It is supposed to be a safety net for the beneficiaries, as well as for the policyholder, wherein they are able to safely secure funds for their immediate family, or whoever the beneficiary is. It should be given that the payout will be able to go through the approval process without any issues, so that the beneficiaries can receive the payout on time.
Yet, that is not always the case. More often than not, it seems, insurance companies will always be looking for one thing or another to shift blame onto the insured or their constituents, in hopes that they do not have to properly payout to the ones that are listed. This can be anything from a delay in the processing to a denial due to faulty paperwork, and everything in between.
When the denials do come through, it always seems like they are trying to run you around in circles. Using words that may not seem fit, to phrases that seem to hold no meaning, it can be like wading through a swamp pit of legal jargon. As such, we have compiled a list of helpful terminology that you may encounter when dealing with denied claims. Keep in mind, these are just some of the terminology:
- Reinstatement. This refers to the immediate date that the policy is reactivated after a termination of the policy due to any number of reasons. This can be brought up if the death occurs during the unknown time frame between the termination of the original policy dates and the reinstatement of the policy after the payments have started going back through.
- Right to Examine. This refers to the period in which the policy may be examined by the policyholder, and deciding if they wish to keep the policy, or cancel it and get the money refunded. This comes into question when the denied claims come through, as the insurance company may default to the fact that the policyholder had the right to examine the contract earlier on.
- Reduced Paid-up insurance. This refers to when a policy payment is reduced by some means, and the premium drops on the policy, or even dropping the premium payments completely while still having the policy active.
- Grace Period. This is the period of time where the policy is still active even after the last payment has been made. Usually in between 30-60 days, this will come into question if the insurance company denies the claim due to the death being outside of the covered time of the policy.
- Contestability. This term refers to the ability of the insurance company to contest and investigate the death of the deceased to see if there was any foul play involved. This will usually refer to possible situations such as the death being extremely quick after the activation of the policy, or possible errors in the paperwork.
If you have any more questions about denied claims terminology and jargon, feel free to contact our offices, where we will be happy to walk and guide you through the legal paperwork, so that you don’t have to do it alone.