Group life insurance coverage is a common workplace benefit designed to offer financial protection for employees’ families. But what many don’t realize is how fragile this coverage becomes when employment ends. Life insurance through an employer is typically conditional—it exists only so long as the individual is considered an “active” employee or takes specific steps to continue coverage after separation. Unfortunately, these policies often end quietly, with vague or insufficient communication from employers and insurers. This leads to claim denials that blindside beneficiaries who assumed coverage was still in force.
The Hidden Risk: Long-Term Illness and Lapsed Group Life Insurance
When employees suffer from long-term illness or disability, they’re often placed on extended leave and eventually moved onto long-term disability (LTD) benefits. During this time, their life insurance policy might appear to remain in effect—but in reality, most policies sunset after a specific period of inactivity, often one year. At that point, unless the employee has applied to convert the group policy to an individual one, or secured a premium waiver under a disability rider, coverage may terminate without further notice.
The result? When that employee tragically passes away, the life insurance claim filed by their spouse or children is denied. And because many beneficiaries are unaware of what should have happened—or what notices should have been given—they may not realize that the denial was wrongful. That’s why consulting with a life insurance attorney is essential as soon as any claim is denied due to employment status or alleged policy lapse. if you need a Connecticut life insurance denial attorney call us.
Why You Should Never Assume Coverage Remains Active After Leaving a Job
Many people mistakenly believe that life insurance coverage remains in place just because they’re still receiving some form of compensation from their employer, such as disability benefits. But the legal definition of “active employment” within a life insurance policy is often very narrow. Without converting the policy, applying for a continuation, or requesting a premium waiver due to disability, coverage ends—even if the employee was still in contact with their employer or receiving other benefits. The key issue is whether the employee was notified of their right to continue coverage and given a meaningful opportunity to do so.
This is where employers and insurers often fail. They may neglect to inform employees of critical deadlines for conversion or continuation. Or, they may send confusing or incomplete documentation that fails to explain the consequences of inaction. When that happens, a wrongful claim denial can result—and legal action may be necessary to challenge it.
Conversion and Waiver of Premium: Your Two Best Options Before Coverage Ends
Before employer-provided life insurance coverage ends, the insured employee typically has two options to preserve their protection: convert the group policy into an individual policy or apply for a waiver of premium due to disability. Converting the policy means paying for it personally, but without having to prove insurability. It’s a valuable option for someone with a chronic illness who wouldn’t qualify for private life insurance elsewhere. However, this option is time-sensitive—usually requiring action within 31 to 60 days of separation from employment or eligibility loss.
A waiver of premium rider is another tool that can save coverage. This rider allows the policy to remain in effect without monthly payments if the insured becomes disabled. However, the waiver must be applied for and approved. Failure to submit the required paperwork can lead to cancellation, even if the insured was entitled to it. Again, employers and insurers are supposed to communicate these options—but often don’t, leaving families to suffer the consequences.
Denied Life Insurance Under ERISA? You May Still Be Entitled to Benefits
Employer-sponsored group life insurance is typically governed by ERISA (the Employee Retirement Income Security Act), a federal law that sets rules for how benefits are administered and how denials must be handled. Under ERISA, insurers and employers are required to provide beneficiaries with notice of policy termination and a clear opportunity to convert or continue the coverage. When they fail to do so, they may be held liable.
If your loved one died while allegedly uninsured due to a lapsed group policy, and you never received proper notice of termination or options for conversion, you may be able to challenge the denial under ERISA. To do this, a formal appeal must be filed with the plan administrator. If the appeal is denied, you can pursue the matter in federal court. But deadlines are strict and the administrative process complex, which is why working with an attorney experienced in ERISA litigation is critical.
Unlike other types of insurance disputes, ERISA cases cannot be casually reopened or retried. Missed deadlines, incomplete records, or procedural errors during the appeal phase can permanently bar recovery. A life insurance lawyer will ensure that appeals are submitted correctly, deadlines are met, and all required evidence is collected to support your claim. This includes requesting the full policy document, summary plan descriptions, and any internal communications related to conversion and termination.
Time is Not on Your Side: Act Quickly After a Denial
Most employer-provided life insurance plans include policy-imposed deadlines to file appeals and lawsuits. While ERISA only requires that these deadlines be “reasonable,” courts have upheld time limits as short as one year. Given the extensive documentation needed to pursue an ERISA appeal—medical records, employment files, disability forms, and insurer correspondence—beneficiaries should act immediately after receiving a denial.
A knowledgeable life insurance attorney can help you preserve your rights by filing a timely appeal and gathering all evidence needed to build a strong case. The sooner you act, the more legal options you will have.
Don’t Let a Technicality Erase Your Loved One’s Legacy
A denied claim for employer-based life insurance often feels like a final blow after the loss of a loved one. But in many cases, the denial isn’t final—and it isn’t lawful. Whether your loved one was on long-term disability, recently separated from their job, or simply unaware of conversion requirements, you may still have a case. If notice wasn’t given, or the opportunity to continue coverage wasn’t provided, that could amount to a wrongful denial under ERISA.