Instead of issuing an approval or denial, life insurance companies sometimes leave claims in limbo by opening so-called investigations that drag on indefinitely. This tactic is most common when the policy amount is large, the insured is young, or the circumstances of death are unclear. By refusing to make a decision, the insurer avoids paying while continuing to earn investment income on the death benefit.
Many states require life insurance companies to approve or deny a claim within 60 to 90 days after receiving all required documentation. Still, some insurers ignore these deadlines, betting that grieving families will not know how to force compliance.
This case shows how that strategy works and how legal action can stop it.
A Promising Life Cut Tragically Short
David was only 17 when his parents, Ron and Sandy, purchased a $4 million life insurance policy on him. While the amount was substantial, the decision was not irrational. David was a nationally competitive swimmer with Olympic potential and multiple full scholarship offers. His parents had spent years investing in training, coaching, and travel, and the policy was intended as financial protection if tragedy struck.
Not long after starting college, that tragedy occurred.
David was found face down in the university swimming pool early one morning. His coach discovered him during routine facility access. Emergency responders attempted resuscitation, but David was pronounced dead at the scene.
An Unclear but Accidental Cause of Death
The autopsy revealed no drugs or alcohol in David’s system. The only notable finding was blunt force trauma to the back of his head. Investigators considered several possibilities, including an accidental strike during a dive or an impact with the pool wall.
There was no suicide note, no history of mental health issues, and no evidence of foul play. The coroner ultimately ruled the death accidental.
That ruling should have ended the matter. It did not.
The Claim Is Filed and the Delay Begins
Ron and Sandy submitted a timely life insurance claim with all required documentation. The insurer acknowledged receipt but quickly signaled that payment would not be forthcoming.
Instead, the company sent a letter stating that it was opening an investigation to rule out policy exclusions. Specifically, the insurer claimed it needed to examine the possibility of suicide or homicide, despite the coroner’s accidental finding and the absence of supporting evidence.
The implication was disturbing. The insurer suggested that David may have intentionally caused his death or that his parents could have been involved due to the size of the policy. These theories were speculative and unsupported, but they served a purpose.
They justified delay.
Three Years Without a Decision
After the initial letter, little happened. The insurer conducted limited interviews, reviewed publicly available reports, and periodically claimed that the investigation was ongoing. No new evidence surfaced. No charges were filed. The cause of death was never revised.
Still, the insurer refused to approve or deny the claim.
Ron and Sandy contacted the company repeatedly. Each time, they were told the same thing. The investigation was ongoing. No timeline could be provided.
For more than three years, the claim remained unresolved. During that time, the insurer retained control of the $4 million benefit and continued to earn income on those funds.
Legal Action Forces Accountability
Eventually, Sandy contacted a law firm that focuses exclusively on denied and delayed life insurance claims. After reviewing the file, the attorney identified a clear violation of state insurance law.
Under applicable regulations, the insurer was required to issue a decision within 90 days once the claim was complete. Endless investigation without new evidence did not toll that obligation.
The attorney filed a lawsuit alleging bad faith delay and breach of contract. Faced with court scrutiny and no factual basis for continued delay, the insurer quickly reversed course. The claim was paid in full, along with interest.
Why Insurers Use Delay as a Strategy
Delaying a claim is often safer for insurers than denying it outright. A denial can be appealed or challenged immediately. A delay keeps the beneficiary in limbo.
Common delay tactics include:
• Opening investigations with no defined scope or deadline
• Repeatedly requesting information already provided
• Raising hypothetical exclusions without supporting facts
• Refusing to issue a formal approval or denial
These practices are not just frustrating. In many states, they are unlawful.
What to Do If Your Claim Is Being Delayed
If your life insurance claim has been pending for more than 60 to 90 days without a clear decision, you should act.
Steps to take include:
• Request a written explanation for the delay
• Ask for confirmation that the claim file is complete
• Demand a decision date in writing
• Preserve all correspondence and records
• Consult a life insurance attorney if the delay continues
Often, legal pressure alone is enough to force a resolution. When it is not, litigation may be necessary.
We Hold Insurers Accountable for Unfair Delays
Our firm focuses on life insurance claim denials and unjustified delays. We know when an investigation is legitimate and when it is a stalling tactic. If an insurer is refusing to act on your claim, we can evaluate whether the delay violates the law and take steps to force payment.
If your claim has been sitting unresolved for months or years, you do not have to wait any longer.