Life insurance was designed so that after a person passes away, his or her loved ones can have a sense of financial security. In many cases, receiving the payout against a life insurance policy can make all the difference in the world to a family that has suffered a loss.
Despite this reality, life insurance companies do not become rich by paying claims quickly. To the contrary, the longer they can hold on to a bunch of money before paying it out to a grieving beneficiary, the more money they can make off via interest, investments, etc.
Consequently, some life insurance companies engage in frustrating games of seemingly endless delays when it comes to paying out claims. They will come up with excuse after excuse to avoid making payment. Meanwhile, the families suffering from these delays could find themselves in financial jeopardy.
As attorneys who specialize in the wrongful denial and delay of life insurance claims, we see insurers play these games every day. We’ve made it our mission to help our clients get the money they’re owed as quickly as possible. One way we can do that is to help educate our clients on the life insurance claim process. In this article, we present some of the basic information you need to know if a life insurance company is forcing you to wait through a long payment delay.
#1: By law, life insurers cannot delay payment of claims indefinitely
Generally speaking, the law requires that a life insurance company provide a beneficiary with a claim decision within 30 to 60 days. When payment decisions are cut and dried, those deadlines are easily met. Likewise, if you’re dealing with a legitimate insurance company, those deadlines will likely be met. Outside of those two examples, however, you may experience significant delays. In those cases, the insurance company is betting that you’re not sophisticated enough to know that they’re operating under legally imposed deadlines. In fact, the more inquiries you make about your claim, the more they may thumb their nose at you. Of course, all of that will change the minute you retain a lawyer who specializes in this area of the law.
#2: Life insurers have a right to investigate, but the investigation can’t go on forever
As noted above, life insurance companies are the most profitable when they are able to avoid paying claims. One of the ways they do this is to assert that a claim is “under investigation.” For example, we frequently see cases where all police and/or autopsy reports rule that the policyholder died from an accident or natural causes. Nonetheless, the insurance company will undertake its own “investigation” in an effort to prove the person committed suicide. Sometimes, this is just a flagrant effort to avoid paying out on legitimate claims. Insurance companies have a right to investigate the circumstances of a policyholder’s death, but they do not have a right to delay decision-making forever.
#3: The best time to call a specialized attorney is before the claim has been denied
If you’re facing an unreasonable delay, the best thing you can do is call an attorney immediately. There are a few reasons for this. First, once the insurance company knows you’ve hired an attorney, they’ll also know that you’re not the type of person who will simply accept a bogus claim denial decision. In other words, they’ll know they cannot just pull the wool over your eyes.
Secondly, if you get an attorney involved right away, its possible your claim will be paid within a matter of days. If, on the other hand, you wait until your claim has been denied and then contact an attorney, you may have to jump through all sorts of procedural hoops in order to initiate a formal claim denial appeal. This will only serve to delay payment even further.
#4: Just because a body hasn’t been found doesn’t mean you can’t collect
In some circumstances, a person has gone missing yet no body has been found. If the person simply walked out their home, you can understand why a life insurance company would want to wait around to see if they show up before paying a claim. In other situations, however, you may be able to get a court to make a “presumption of death.” Specifically, when things like airline crashes or other mass disasters happen and your loved one’s body can’t be found, a specialized lawyer may be able to help you get that presumption so that your claim can be paid without further delay.
#5: Suicide is not an automatic reason for a claim denial
Sometimes, the insurer will justify its delay in paying out on a claim by saying it is trying to determine whether the policyholder committed suicide. It’s important to know that even if the insurer is actually engaged in a legitimate investigation in this regard, suicide is not always an automatic basis for a claim denial. In fact, most policies only deny a payout if the insured takes his own life within the first two to three years of the policy period. Nonetheless, insurance companies are aware that most consumers believe suicide is an automatic basis for claim denial. In other words, they may use a suicide investigation as a means to avoid payment even though a suicide would not justify a claim denial.
The truth is, there are endless reasons that life insurance companies use to justify claim delays. Most of them are just excuses. The life insurance company is counting on you not to know the law in this area. They’re also betting that you’re too upset about the loss of your loved one to do anything about their delays.
Don’t let big insurance companies disrupt your well-being in this manner. Our firm has been successfully contesting life insurance claim delays and denials for many years. We can make sure the insurance company is dealing with you fairly and we can also help get you the money you’re owed as quickly as possible. Call us today. We’re here to help.