Consumers obtain life insurance through various avenues in today’s insurance market. Some receive advertisements in the mail, while others might seek out policies on their own through the most reputable providers. Then there are those lucky enough to work for a company that provides group life insurance as an employee benefit. Just as any major life decision, there are some positives and negatives to relying on employer provided life insurance. Luckily, we are here to help explain this type of policy so that our consumers can make an educated decision on which route they should go when seeking to protect their loved ones with life insurance coverage.
How It Works
If your employer offers life insurance as a benefit, it will often be in the form of elective group life insurance coverage. Similar to group health insurance, individuals are often able to get locked in at a discounted group rate without certain health and lifestyle risks being considered by the provider. There is a great amount of convenience by going this route for health insurance as well, as the premiums are automatically deducted from the employee’s paycheck instead of having to submit premiums at a separate point in time. The amount of coverage is generally tailored to your income level and the premium deductions will reflect this appropriately. While these features of employer provided life insurance are generally considered a positive, there are some negative features about these policies as well.
While each policy will vary depending on provider, many plans are based on the employee working full-time for the employer at the time of death. In today’s world, it is not uncommon for employees to only stick with one employer for a short period of time, usually five years or less. This is even more common amongst Millennials in the workforce, as a majority of this generation will jump around between various employers. If the employee does not take the affirmative action of converting the plan to an individual policy upon departing employment with the company, then the employee’s beneficiaries may be out of luck when the employee passes away.
Denied Claims for Employer Provided Life Insurance
As shown above, there are situations in which opting in to an employer provided life insurance plan can be unfavorable if the policyholder is not proactive about taking the necessary steps to keep the policy in good standing from a claims standpoint. There are other reasons for which an insurance provider might deny a claim on an employer provided life insurance plan as well. That being said, not every reason a provider might provide to a claim filer is legit. In fact, many providers may provide reasons for a denied claim that simply do not make sense under the circumstances. If you feel that your claim has been wrongfully denied, you do not have to accept the insurance providers determination. There are avenues to contest this determination, such as an appeal or speaking with an attorney to contest through legal proceedings, that a denied claimant might consider. An experienced legal team like our office can help you fight through the difficult times.