As we have talked about quite often, there are many reasons as to why a life insurance claims denial may come up. This can range from simple paperwork mismanagement, to having the cause of death come under fire with illegal drugs and substances. None of these are very fun to deal with, as working through legal paperwork after an unexpected death can be heart-breaking.
Unfortunately, this is the scenario that many people deal with when attempting to file for a claim on a life insurance policy, only to be told that they were denied due to misrepresentation or problems with the contract. This can be compounded when the beneficiaries and policyholders seemingly did everything right and challenge the insurance company, but are told that the insurance company is in the right. This is something that can get extremely convoluted in an instant, so we have compiled a few scenarios and problems to help get you started in these tough times.
Breach of Contract
How does vague and ambiguous wording in a contract a possible problem?
If the wording in a life insurance contract is not specific, it hurts the beneficiaries, as it affords the insurance companies multiple interpretations to go off of. If the line that stipulates that “you will be covered in the event of any motor vehicular accident”, it is quite clear and crisp how you are covered in this situation. But, if it is stated that “you will be paid a benefit if you die in an accident..independent of other causes”, the vague wording may result in the fact that the “other causes” can cover just about anything. This results in the insurance company interpreting it as they do not have to payout to the beneficiaries, as the death resulted in, to them, “other causes”.
How can I challenge this?
There are plenty of ways to challenge these problems. The first way is to make sure you receive and keep an original of the documented contract. This way, no changes can be made without your knowledge and understanding. Second, make sure each part is clearly worded. Make sure that there is no vague language as the contract is being made. If denied, find an experienced and knowledgeable life insurance attorney.