If a life insurance claim from an employer-sponsored policy is denied or delayed, it’s critical to act quickly. Most of these policies are governed by the Employee Retirement Income Security Act of 1974 (ERISA), a federal law that imposes strict deadlines and procedural requirements. You typically have just 60 days to file a written appeal after receiving a denial—missing that deadline could mean losing your right to benefits altogether. Because of these rigid rules, it’s vital to work with an experienced life insurance attorney as soon as the claim is denied.
ERISA covers most private-sector employer-provided life insurance policies. Unlike individual policies purchased directly from an insurer, ERISA-governed plans follow a different set of legal rules that limit your rights in certain ways—most notably by requiring that all internal appeal options be exhausted before a lawsuit can be filed. This procedural step isn’t just a formality; it’s the foundation of your entire case. Once you file the appeal, you cannot later introduce new evidence in court. That’s why having a qualified attorney involved from the outset can make or break your case.
Once a denial letter is issued, the insurer’s motivation to negotiate tends to wane—especially if they see no risk of litigation. The 60-day ERISA deadline creates a narrow window for action. If your appeal is incomplete or late, your legal options diminish significantly. By partnering early with an attorney who understands the nuances of ERISA litigation, you preserve your strongest chance at success.
Many claim denials under ERISA are rooted in preventable administrative mistakes by employers or plan sponsors. These might include failing to enroll an employee properly, not submitting premium payments to the insurer, or miscommunicating eligibility requirements. Because ERISA imposes fiduciary duties on employers and plan administrators, they can be held liable if their negligence causes the loss of coverage or benefits. Often, these employers have liability insurance that may cover their errors—creating an additional path to recovering benefits when the insurer alone refuses to pay.
But ERISA also imposes limitations that make navigating a denial particularly complex. You cannot sue the insurer for bad faith, and jury trials are not available. All arguments must be made based solely on the claim file and the contents of your appeal. This makes it crucial that your appeal is complete, detailed, and supported by all available evidence. Once the administrative record closes, there are no second chances to supplement the file.
A seasoned life insurance lawyer knows how to obtain the full administrative file, request the insurer’s internal guidelines, and identify procedural errors that can strengthen your position. This knowledge becomes especially valuable in cases involving ambiguous plan language, overlooked beneficiary designations, or incomplete documentation by the employer.
Common reasons for ERISA life insurance claim denials overlap with those seen in privately held policies. These include material misstatements on the application, suicide during the contestability period, lapses in coverage due to unpaid premiums, or disqualifying circumstances like death during the commission of a felony. But ERISA claims often bring additional complications that are unique to employer-based plans.
Some of the most frequent employer-based denial scenarios include:
The insured was no longer employed at the time of death due to resignation, retirement, or termination
The deceased did not meet the minimum required work hours
The policy was never converted to individual coverage after employment ended
The employee was on unpaid leave, medical leave, or disability leave and lost eligibility unknowingly
The employer failed to notify the insurance company of changes in status
AD&D benefits were reduced or excluded without proper disclosure
Premiums were not paid due to payroll errors or company oversight
The employee was in military service or died in an excluded event such as terrorism or war
These issues often come down to mismanagement by the employer or plan administrator. When an employer fails to fulfill its fiduciary duty, an attorney can argue that the loss of benefits is attributable to that failure—not the actions of the insured or the beneficiaries. This can significantly shift the outcome of your appeal.
Furthermore, ERISA preempts most state law remedies. You cannot rely on breach of contract or state-level insurance bad faith claims. The entire process unfolds under federal law, and strict compliance with ERISA procedure is non-negotiable. Courts will not make exceptions, even for good-faith mistakes by beneficiaries who attempted to file appeals on their own.
That’s why legal guidance is not just helpful—it’s essential. By working with attorneys who focus on ERISA-governed life insurance claims, you gain access to tools and strategies that increase your odds of recovery. This includes requesting full plan documents, highlighting procedural irregularities, and building a compelling case within the narrow framework ERISA allows.
Many law firms offer contingency-based representation in these matters, meaning you won’t pay upfront legal fees unless benefits are recovered. The sooner you involve legal counsel, the better positioned you’ll be to meet deadlines, avoid errors, and preserve your right to full compensation. If you need life insurance claim help in Delaware we are here for you.
FAQ: ERISA Life Insurance Claim Denials
What is ERISA and why does it matter in a life insurance claim?
ERISA is a federal law that governs most employer-sponsored life insurance plans. It imposes specific rules for how claims must be appealed and limits the legal remedies available to beneficiaries.
Can I sue the insurance company immediately after a denial?
No. Under ERISA, you must first exhaust the internal appeal process before you can file a lawsuit. Skipping this step will usually result in your lawsuit being dismissed.
How long do I have to appeal a denied ERISA life insurance claim?
You generally have 60 days from the date of the denial letter to submit a written appeal. Missing this deadline can permanently bar your claim.
Can I submit new evidence if my appeal is denied and I have to go to court?
No. In ERISA cases, the court only considers the information that was submitted during the appeal. That’s why it’s essential to build a strong appeal record.
Can I get punitive damages or a jury trial in an ERISA case?
No. ERISA does not allow punitive damages, and you are not entitled to a jury trial. Legal decisions are made by a judge, based on the administrative record.
Who is responsible if an employer failed to enroll the employee in the life insurance plan?
If the employer's error caused the loss of coverage, they may be held liable under ERISA’s fiduciary duty provisions. An experienced attorney can pursue claims against both the employer and any insurer involved.
Should I get a lawyer for an ERISA life insurance appeal?
Absolutely. Because of ERISA’s strict procedures and limits on legal remedies, a knowledgeable attorney can make a significant difference in the outcome of your case.