A frequent issue that beneficiaries face when filing a delayed claim is the life insurance company claiming they waited too long and cannot file. This may or may not be true since laws vary from state to state, and the circumstances of your policy have a bearing. Though submission deadlines are typical for life insurance policies, some states require strict adherence to these timeframes, so being “too late” is possible.
An experienced life insurance claims attorney can help one figure out if there are exceptions to these rules that a beneficiary might meet to file after the time limit has expired. The reason a late claim filing would be possible is that despite the delay, it won’t affect the carrier’s ability to investigate. This is still subject to state discretion and may require the beneficiary to demonstrate good cause for the late benefit request. An experienced lawyer will prove invaluable in such a case since the burden will fall on the claimant to prove the insurer won’t suffer prejudice.
When Is It Too Late to Sue the Life Insurance Company?
The most important action to take when receiving a life insurance claim denial because of delayed filing is to avoid waiting to file a suit. Every day that passes will add to the insurer's argument against allowing a late filing for death benefits. States also have hard deadlines for suing a life insurance company. Depending on the type of circumstances of the case, they may require different legal steps, which can further complicate the process. Worse, all of these actions take time, and state laws may dictate how much time a suit has to settle from the moment it gets filed with the court.
Some essential steps to take when suing a life insurance carrier regarding a delayed benefit claim include:
Obtaining the death certificate
Having the original insurance application with the named designated beneficiaries
Contacting the insurance company about the passing of the insured
Filling out claim form paperwork accurately and completely
As the claimant on the policy, all of these steps are essential to apply for a benefit payment. When suing the insurance company, after a denial because of late filing, this information will show the court that As a policy claimant, one must have all of this completed to proceed in getting a claim payment. If a payout gets denied because of delayed filing, all of this information will be part of a lawsuit.
The time limit for a legal claim varies by state and the type of demand being made. Additionally, they will all have specific court-imposed deadlines that will determine the validity of a claim. Another complication to any jurisdiction and its statute of limitations involves various legal avenues the life insurance company can use to delay a suit further. These tactics will continue spending the time permitted to pursue action against the insurer and requires the assistance of an attorney disciplined in this area of law.
One should not sit by and wait patiently for a decision regarding a late claim. This is something that many beneficiaries make the mistake of doing, and it costs them precious time allowed for suing the carrier. Waiting on responses to calls and letters for days and weeks is just one more tactic to avoid a payout. Attorneys that specialize in life insurance claims understand these purposeful actions taken by insurers to deny claims and will work to prevent these big corporations from delaying a beneficiary from their day in court.
It is important to note that many states also have “bad faith” laws that forbid insurance companies from wrongfully withholding payment or canceling a policy without just cause. To do this subjects the insurer to potential punitive damages, and is why if one has not filed for a death benefit against the carrier within time frames dictated by the policy and governing jurisdiction guidelines, it is possible to never be able to sue. This is even despite being a designated beneficiary or suffering bad faith practices by the insurance company.
Every life insurance policy has an implied promise to act in good faith and be fair in their dealings with their consumers. This translates into committing to not take purposeful actions against a policyholder or their beneficiaries’ coverage benefits.
Compliance with this good faith provision would include:
Communicate policy provisions accurately
Respond to claim inquiries on time
Make decisions and payouts on claims promptly
Insurers who do not follow through with their duties and obligations without good reason could be held liable for bad faith conduct. Actions that would indicate an insurance company is doing so could include:
Wrongly canceling a policy to avoid payout
Declaring the cause of death excluded despite evidence to the contrary
Purposely delaying response to a claim to run out time for lawsuit
Proving a case for bad faith is critical for claims that were denied because of late filing since this could increase a beneficiary's recovery substantially. The courts may award additional compensation based on the plaintiff's pain and suffering and any other warranted punitive damages.
Delayed death benefit filings are problematic without a life insurance lawyer's help to assist in representing the case as there is a myriad of excuses for the insurer to use when denying a claim. The important lesson to remember in this scenario is that the insurance carriers will always shift the blame to the claimant and do everything possible to minimize or deny death benefit requests.