As a long-term financial planning tool, life insurance policies have become popularized and considered essential to successful estate planning. However, using this coverage effectively can be tricky if you don't understand how payouts are conducted. In addition, simple mistakes in requesting death benefits can lead to ongoing delays and frustrating claim denials, making understanding the claim process even more crucial.
When the insured passes away, the proceeds of their life insurance policy should go to the beneficiaries they designated. This requires filing a claim for death benefits which involves the insurer reviewing the policy and issuing a payout if not issues are found.
How Do I Handle a Denied Death Benefits Claim?
Even though you can do this independently, it's advisable to first consult with experienced life insurance attorneys like those at our firm. Submitting a claim may seem like no big deal, but specific provisions must be met to receive a payout. A skilled lawyer who regularly practices in this area of law can evaluate the circumstances of your claim and help you navigate any challenges that might arise.
Many insurers can get claims paid out within 7 to 14 days of receiving all the documentation they need to process your request. But, problems frequently arise during the initial review process because they will likely look for any excuse to deny the claim and save their bottom line. This can lead to unnecessary delay in issuing your benefits.
There are countless reasons that death benefit payments get delayed or denied, but these are the most common:
The insured passes within two years of initially establishing their life insurance policy
The covered individual committed suicide, and there is a provision denying benefits for this cause of death in their policy
Homicide is the listed cause of death, and the insurer must wait until the investigation clears the beneficiary(ies) as a suspect(s)
Generally, life insurance companies will issue a lump sum payment to the beneficiary for any death benefit owed. But, there are additional options available from some insurers, including:
Proceeds held at interest
Personal transition account
Annuity Options, including those with life contingencies
When your loved one dies, you need their promised life insurance benefits sooner than later to help with the financial strain of their passing. Our life insurance lawyers concentrate our practice in representing individuals and surviving family members navigate the complicated landscape of life insurance claims and appeals. Trust our demonstrated experience and successful case track record to get your death benefit request resolved. We're available around the clock to schedule a free consultation through our website.