If your loved one’s life insurance claim was denied due to an alleged misstatement on the application, you may feel overwhelmed and unsure where to turn. A denial, however, is not always the final outcome. Our life insurance attorneys recently recovered a $1,000,000 payout from MetLife after the insurer initially refused to pay based on claimed misrepresentation.
This case illustrates a critical point. Life insurance denials are frequently challenged and overturned when insurers overreach or misapply the law.
Why Life Insurance Companies Deny Claims and When They Are Wrong
Large insurers often deny claims using technical arguments that sound definitive but do not always hold up under legal scrutiny. Some of the most common reasons given include:
Alleged Misstatements on the Application
Insurers frequently claim the policyholder failed to disclose a medical condition, prescription history, or personal habit. These allegations are often based on vague application questions or incomplete record reviews.
Contestability Period Denials
Many insurers imply that a death occurring within the first two years automatically allows them to deny the claim. That is incorrect. The contestability period only permits investigation. The insurer must still prove that a material misstatement occurred and that it affected the underwriting decision.
Policy Lapse for Nonpayment
Insurers sometimes argue the policy terminated due to missed premiums. In practice, denials often stem from improper lapse notices, incorrect grace period calculations, or notices sent to the wrong address.
Exclusions for Alcohol or Risky Behavior
Policies may include exclusions for certain activities, but insurers frequently stretch these provisions beyond their intended scope. Unsupported assumptions about alcohol use or behavior can often be challenged.
Unsupported Allegations of Fraud
Some denials rely on broad accusations of fraud without evidence. These tactics are commonly used to discourage beneficiaries from pursuing payment.
Misstatements and the Contestability Period Explained
When a policyholder passes away within two years of the policy taking effect, the insurer may review the application for inaccuracies. However, the burden is on the insurer to prove two things:
The information provided was false or misleading
The insurer would not have issued the policy if the correct information had been disclosed
This is a high legal standard and one insurers frequently fail to meet.
In our recent MetLife case, the company claimed the policyholder failed to disclose a prior medical issue. Our attorneys obtained complete medical records, analyzed the exact wording of the application, and demonstrated that the question was ambiguous and that the alleged omission had no impact on the underwriting decision. MetLife reversed its denial and paid the full $1,000,000 benefit.
What to Do If Your Life Insurance Claim Is Denied
If you receive a denial letter, do not assume the insurer’s decision is correct. Many wrongful denials succeed simply because families do not challenge them.
To protect your rights:
Request a written denial explanation identifying the exact reason for the decision
Preserve the policy, application, and all correspondence
Avoid providing additional statements or documents without legal guidance
Contact a life insurance attorney experienced in denied claim litigation
Our firm focuses exclusively on life insurance disputes, including denials based on alleged misstatements, contestability issues, policy lapses, exclusions, and interpleader actions. We have recovered millions of dollars for beneficiaries nationwide.
If your life insurance claim has been denied, we are prepared to review your case and fight for the benefits you were promised.