In essence, life insurance companies thrive when they avoid paying out claims. If they were obligated to honor every claim made by policyholders, profitability would become an elusive goal. Consequently, these companies are incessantly seeking grounds to deny claims. Amongst the common justifications for denial, alcohol occupies a prominent position. Alcohol consumption and its abuse can lead to severe health complications, including liver disease, cancer, and strokes. Moreover, alcohol intoxication can induce individuals to partake in risky behaviors, elevating the likelihood of premature death. Absent exclusions and exceptions pertaining to alcohol intoxication, insurance companies would be compelled to fulfill claims even when death directly resulted from alcohol consumption and could have been prevented. We recently achieved success in overturning the denial of a $100,000.00 life insurance claim by Globe, which was attributed to alcohol-related circumstances.
Outlined below are prevailing scenarios involving alcohol where life insurance policies tend to reject claims:
- Alcohol Intoxication Exclusion
In a majority of states, life insurance companies possess the authority to include exclusions pertaining to alcohol usage within policies. If the insured individual was under the influence or consuming alcohol at the time of their demise, regardless of whether the cause of death was directly linked to alcohol, insurers incorporating an alcohol intoxication exclusion will likely deny the claim.
- Misrepresentation on the Initial Application
During the completion of a life insurance application, inquiries regarding alcohol consumption frequency, quantity, and any history of alcoholism typically arise. Providing false information, denying alcohol consumption, or concealing a past or ongoing struggle with alcoholism may prompt an investigation if the insured individual passes away and alcohol is found to be a contributing factor. Should the company uncover deceit or omission of truth, any claims are likely to be rejected.
- Alcohol as the Cause of Death
If the insured individual's demise can be attributed to alcohol usage, the company will likely reject the claim. This could encompass accidents that occurred due to intoxication, such as falls from heights, or deaths directly resulting from alcohol poisoning.
- Death During the Contestability Period
Life insurance policies generally include a contestability period of two years. During this period, the company reserves the right to contest claim payouts. When a death transpires within this timeframe, the company scrutinizes all information provided on the application, medical questionnaires, and other relevant documents, aiming to identify grounds for denial. Even if the insured's death is unrelated to alcohol, the company may employ the discovery of false statements regarding alcohol consumption on the application to justify denying the claim.
Our accomplished life insurance attorneys possess the expertise to contest and overturn any denied life insurance claim or beneficiary dispute, securing favorable outcomes.