A denied life insurance claim can be devastating, especially when the denial is based on the insured’s chronic illness. Life insurance policies are legally binding contracts that come with strict requirements, and when a policyholder is diagnosed with a chronic condition—whether disclosed or not—it can lead to a claim denial. In this blog, we’ll explore why chronic illnesses can lead to denied claims, how insurance companies use exclusions to their advantage, and the steps you can take if your life insurance claim has been denied due to a chronic illness.
Why Do Chronic Illnesses Lead to Denied Life Insurance Claims?
When applying for life insurance, it’s essential to be honest and transparent about your health. Insurance companies base their decision to issue a policy—and the premiums they charge—on the information provided in the application. However, chronic illnesses can complicate this process, and if not handled correctly, can result in a claim being denied.
1. Misrepresentation on the Application
One of the most common reasons for a denied claim due to chronic illness is the misrepresentation of the applicant’s health status on the life insurance application. If the insured person has a chronic illness, such as diabetes, heart disease, or cancer, and fails to disclose it when applying for the policy, the insurer may deny the claim when they discover the omission.
Insurance companies take misrepresentation very seriously because it can impact their bottom line. If the insured person did not fully disclose a chronic illness or any related health complications, the insurance company has the legal right to deny the claim, even if the chronic illness was not directly related to the cause of death.
2. Failure to Update the Insurer About Changes in Health
Chronic illnesses often evolve over time, and if the insured’s health deteriorates, it’s important to update the insurer about any changes. Failing to inform the insurance company of new diagnoses, treatments, or changes in the severity of a condition can lead to a denied claim if the insurer later discovers that the insured had a more serious chronic illness than originally reported.
Even if the insured did not intentionally hide their condition, the failure to update the insurer may lead to the claim being rejected, particularly if the chronic illness significantly impacted the individual’s health or caused death.
3. Exclusions for Certain Chronic Illnesses
Most life insurance policies include exclusions for specific conditions or scenarios. A chronic illness may fall under these exclusions if the insurer deems the illness to be too risky or if it is explicitly listed in the policy. For example, a policy may have a clause that excludes coverage for deaths caused by conditions related to chronic heart disease or cancer if the insured did not disclose these conditions at the time of application.
In some cases, insurers may argue that the chronic illness directly contributed to the individual’s death, even if the cause of death appears to be unrelated. This can lead to a denial of the claim, especially if the insurer believes the chronic illness played a role in weakening the person’s health over time.
What Chronic Illnesses Are Commonly Excluded in Life Insurance Policies?
Chronic illnesses can vary in severity and type, but certain conditions are more likely to lead to a denied claim. Common chronic illnesses that insurers may consider as exclusions include:
1. Heart Disease
Conditions like coronary artery disease, heart failure, and arrhythmias are common exclusions for life insurance policies. If the insured person has a history of heart disease and fails to disclose this condition when applying for the policy, the insurer may deny the claim if the cause of death is related to a heart condition, even if it wasn’t directly the cause of death.
2. Cancer
Cancer is another chronic illness that can cause life insurance claims to be denied. If an individual has been diagnosed with cancer and either did not disclose it on the application or failed to inform the insurer about a recurrence or progression of the disease, the insurer may reject the claim. This is particularly true if the individual had been receiving treatment for cancer or had recently recovered from it.
3. Diabetes
Diabetes, especially when it is poorly controlled, can lead to complications such as heart disease, kidney failure, and stroke. Insurers may deny a claim if the insured person had a history of diabetes but did not disclose the condition on their application, or if the condition worsened without notifying the insurer.
4. Chronic Respiratory Diseases
Conditions like chronic obstructive pulmonary disease (COPD) or asthma can be disqualifying factors for life insurance coverage if the condition is severe or has led to complications. If an individual with these conditions dies, the insurer may investigate whether the condition contributed to the death.
How to Handle a Denied Life Insurance Claim Due to a Chronic Illness
If your life insurance claim has been denied due to a chronic illness, it’s important to take immediate action. Below are the steps you can take to challenge the denial and work toward a resolution.
1. Review the Denial Letter
The first step is to carefully review the denial letter from the insurance company. The letter will typically outline the specific reasons for the denial, including any misrepresentation of health conditions or policy exclusions that may have contributed to the decision.
If the denial is based on a misrepresentation, you should check whether the condition was deliberately left out or if it was simply an oversight. In some cases, an honest mistake may be a valid reason to appeal the denial.
2. Gather Documentation
Collect all relevant documentation to support your case. This includes:
Medical records: If the chronic illness was well-documented by healthcare providers, gather these records to show that the insured’s condition was not hidden or misrepresented.
Insurance application: Review the application to see if there was any room for misunderstanding or omission.
Death certificate: The cause of death should be clearly outlined on the death certificate. If the cause of death was unrelated to the chronic illness, this can help challenge the insurer’s decision.
3. Consult with a Life Insurance Attorney
If you believe the denial was unfair or unjustified, it’s time to consult with a life insurance attorney. An attorney specializing in life insurance claims can help you navigate the appeal process, work with the insurance company, and, if necessary, take legal action to ensure that the claim is paid out.
An attorney can also help you understand whether the chronic illness played a legitimate role in the death and whether the insurer’s exclusion was valid. Call if you have Alabama life insurance claim issues