Simply put, life insurance companies only make money if they don’t have to pay out claims. If they had to pay out a claim for every single person who actually purchased a life insurance policy, they would never be profitable. For this reason, companies are always searching for reasons to deny claims. Alcohol is an especially common reason that a company would deny a claim. Alcohol use and abuse can cause serious health problems, such as liver disease, cancer, strokes, and more. Additionally, alcohol intoxication can lead a person to engage in riskier activities, making an untimely death more likely. Without alcohol intoxication exclusions and other exceptions, companies would be required to pay out claims even when the death was directly related to alcohol use and could have been avoided. Our life insurance attorneys just won a $100,000.00 Globe life insurance claim denied due to alcohol.
The following is a list of common circumstances involving alcohol where life insurance policies deny claims:
Alcohol Intoxication Exclusion
In a majority of states, life insurance companies are permitted to add exclusions related to alcohol use to policies. If the insured was intoxicated or drinking alcohol at the time of their death, even if the death was not directly related to their alcohol use, insurance companies who have an alcohol intoxication exclusion will likely deny the claim.
Misrepresentation on Initial Application
Anytime you fill out a life insurance application, you will likely be asked questions about your alcohol use, including how often you drink, how much you drink, and any past or current treatment for alcoholism. If you lie on your application and say that you never drink or have never dealt with alcoholism, and you then pass away and alcohol is involved, the company will investigate. If they find out that you lied or omitted the truth, any claims will be denied.
Alcohol Caused The Death
In a situation where an insured dies as a result of alcohol use, the company will deny the claim. Whether this is an accident that occurred because the insured was intoxicated, such as falling off of a roof, or the death was a direct result of alcohol poisoning, this will lead to a denial.
The Death Occurred During The Contestability Period
Life insurance policies generally have a two-year period where the policy is contestable. This means if the insured passes away within those first two years, the company can contest the payout. When a death occurs during this period, the company will go through all information on the application, medical questionnaire, and any other documents provided as a way to find a reason to deny the claim. If the insured dies and it has absolutely nothing to do with alcohol, but the company finds that the insured lied about drinking alcohol on their application, they will use this in an attempt to deny the claim.
Our life insurance lawyers can fight any denied life insurance claim or life insurance beneficiary dispute and win.