Denied AD&D Claim Reversed: $300,000 Recovered for Beneficiary After Insurer Misused Exclusion
Our life insurance attorneys recently secured a $300,000 payout for a beneficiary whose Accidental Death & Dismemberment (AD&D) claim was wrongly denied. The insurer refused to pay out under the policy, arguing that the death did not qualify as accidental due to a contested policy exclusion. However, after carefully reviewing the contract terms, investigating the circumstances surrounding the death, and challenging the insurer’s interpretation, we successfully obtained the full amount owed to the grieving client.
This case demonstrates the critical importance of challenging life insurance and AD&D denials, especially when insurers overreach by misapplying policy exclusions or relying on vague interpretations that contradict the actual contract language. With experienced legal representation, wrongful denials can often be reversed, restoring the financial support the policyholder intended for their loved ones.
Why Life Insurance and AD&D Claims Are Frequently Denied
Life insurance companies deny claims for a range of reasons, but most often cite one or more policy exclusions. Exclusions are specific events, causes of death, or behaviors that the insurance contract says are not covered. Even if premiums were paid faithfully and the policy is in good standing, a valid-looking exclusion can be enough for the insurer to reject a claim—unless beneficiaries know how to fight back.
AD&D coverage, in particular, is prone to exclusions. These policies cover accidental deaths and certain injuries but generally exclude deaths resulting from natural causes or actions the insurer deems to be intentional or foreseeable. Unfortunately, some insurers try to stretch the meaning of exclusions beyond what the policyholder agreed to when the contract was signed.
Common Exclusions That Insurers Rely On
Some of the most frequently cited life insurance and AD&D exclusions include:
Suicide (typically within the first two years of the policy)
Material misrepresentations on the application
Deaths that occur while committing a felony or engaging in illegal activity
Deaths resulting from military action or war (often seen in older policies)
Non-accidental deaths under AD&D coverage
In the case we resolved, the insurer attempted to label the death as “non-accidental” and claimed that the surrounding circumstances fell under an undefined exclusion. This is a common tactic used to avoid paying claims, particularly when the incident involves factors like substance use, criminal charges, or unexpected health events.
By obtaining the forensic reports, reviewing the police documentation, and conducting a detailed analysis of the policy terms, our legal team proved that the death fell squarely within the policy’s definition of “accidental.” As a result, we compelled the insurer to honor the full $300,000 benefit.
The Contestability Window: Where Insurers Focus Denial Efforts
Life insurance policies contain a provision known as the contestability clause, which allows the insurer to closely examine any claims made within the first two years of the policy’s effective date. During this window, the company may review the original application to identify any misstatements or omissions that could void the policy.
While this provision is meant to protect insurers from fraud, many companies misuse it to deny legitimate claims over minor or irrelevant discrepancies. In fact, some insurers use the contestability window as a blanket excuse to delay payment or pressure beneficiaries into walking away from claims they rightfully deserve.
In our client’s case, the insurer issued the denial just before the two-year mark, attempting to take advantage of the contestability clause. However, we discovered that the insurer had been aware of the alleged issue for months and intentionally delayed their decision—an act that supported our argument that the insurer had waived its right to contest the claim.
Suicide and Misrepresentation: The Most Common Denial Tools
Most modern life insurance policies have narrowed their exclusions to two key areas:
Suicide – Policies almost always exclude suicide during the first two years. If suicide occurs during this period, the insurer typically refunds the premiums paid rather than paying out the death benefit. After the two-year period, suicide is generally covered.
Material Misrepresentation – If the insurer can prove the insured lied or withheld critical information when applying—such as a serious health condition, smoking habit, or risky hobby—it may rescind the policy. However, the misrepresentation must be material to the underwriting decision. Innocent mistakes or immaterial omissions typically do not justify a denial.
Even these two exclusions require clear evidence and must be applied according to strict legal standards. Insurers cannot deny a claim simply because the insured failed to mention a minor detail unless they can prove it would have changed the issuance or pricing of the policy.
The Incontestability Clause: Your Protection After Two Years
Most life insurance contracts include an incontestability clause, which bars the insurer from denying a claim based on misrepresentation after the policy has been in force for two years—unless they can prove outright fraud. Fraud requires intent, which is significantly harder to prove than a simple error or omission.
In our case, we were able to argue that the insurer’s delayed investigation and denial occurred in bad faith, and that they had effectively waived their contestability rights. This position helped us gain leverage in negotiations and ultimately led to the full payout.
Frequently Asked Questions About Denied AD&D and Life Insurance Claims
Why do insurance companies deny AD&D claims?
Insurers often deny AD&D claims by arguing that the death was not accidental, or by pointing to exclusions involving risky behavior, intoxication, or pre-existing conditions. These denials often hinge on how “accidental” is defined in the policy.
What is a policy exclusion in life insurance?
An exclusion is a clause that limits the insurer’s liability. Common exclusions include suicide within the first two years, deaths from illegal activities, and non-accidental causes under AD&D policies. Exclusions must be clearly stated to be enforceable.
Can an insurer deny a claim during the contestability period for any reason?
No. Even during the contestability period, the insurer must show that a misstatement or omission was material. Minor or unrelated inaccuracies usually do not justify denial.
What is the difference between a misstatement and fraud?
A misstatement is an incorrect or incomplete answer on the application. Fraud requires an intent to deceive. Insurers can typically only void a policy after two years if they prove fraud, not innocent mistakes.
Can a denied AD&D claim be appealed?
Yes. You can appeal a denial by submitting additional documentation, challenging the insurer’s interpretation, or involving an attorney to negotiate or litigate. Many claims are reversed during the appeal process.
What is the incontestability clause?
This clause prevents the insurer from denying a claim based on misrepresentation after the policy has been active for two years. After this period, the only way an insurer can rescind a policy is by proving intentional fraud.
What is considered an accidental death under AD&D policies?
Accidental death typically refers to a sudden, unexpected, and unintentional death. It excludes deaths from illness, natural causes, or suicide—but each policy defines this differently. It's important to read the exact policy language.
How do I know if a denial is legitimate?
The best way to determine the validity of a denial is to consult a life insurance attorney. They can assess whether the policy language supports the insurer’s reasoning or whether a legal challenge is appropriate.
Are older policies more likely to have outdated exclusions?
Yes. Some older or group policies may include exclusions for acts of war, aviation deaths, or other uncommon scenarios. Insurers sometimes try to revive these exclusions, even when they are no longer standard.
Can a beneficiary take legal action against an insurer?
Absolutely. If an insurer wrongfully denies a claim, the beneficiary can sue for breach of contract, bad faith, or seek damages under applicable insurance laws. A lawyer can guide you through this process and maximize your recovery.