$130,000 Denied Banner Life Insurance Claim Successfully Recovered
We are pleased to announce the successful recovery of a $130,000 denied life insurance claim from Banner Life on behalf of our client. The claim was initially denied due to alleged misrepresentations made during the application process. Our life insurance attorneys intervened, reviewed the case, challenged the insurer’s basis for denial, and ultimately secured the full payout. This case is an important reminder of how common application issues—like misreported income or failure to disclose other policies—can lead to wrongful denials. Fortunately, with the right legal representation, many of these denials can be overturned.
Why Lying About Income Can Lead to Life Insurance Claim Denial
Lying about income on a life insurance application can result in a claim denial, even if the cause of death has no connection to the misrepresentation. When an applicant applies for life insurance, the insurer evaluates the application to determine eligibility, assess risk, and decide how much coverage is appropriate based on financial justification. A person’s income helps the insurer determine whether the coverage requested aligns with the applicant’s economic worth. If someone inflates their income, they may be approved for a larger policy than they would otherwise qualify for, which increases the insurer’s potential liability. This is why insurance companies treat income misrepresentation as material, meaning it significantly affects the underwriting decision. If the misrepresentation is discovered after death—especially during the two-year contestability period—the insurer may deny the claim entirely, citing fraud or breach of the duty of good faith. In many cases, insurance companies do not investigate application details until a claim is filed, leading grieving families to be blindsided by a denial. However, not all income discrepancies are grounds for denial. If the applicant made a good faith error, or if the income had fluctuated and the application reflected an estimated figure, a skilled attorney may be able to prove the misstatement was immaterial or non-intentional and secure payment of the claim.
How Failure to Disclose Another Life Insurance Policy Can Trigger Claim Denial
Non-disclosure of an existing life insurance policy during the application process is another common reason for claim denial. Insurers require disclosure of all other in-force life insurance policies to assess the total coverage an individual has across all providers. This is part of the financial underwriting process, which is designed to ensure that applicants are not over-insured relative to their income or net worth. When an applicant omits information about an existing policy—whether intentionally or by mistake—the insurer may later argue that the omission prevented them from accurately assessing the total risk. In many cases, insurance companies include specific questions on the application that require the applicant to list all other policies, their coverage amounts, and the issuing companies. Failure to answer these questions truthfully can be treated as a misrepresentation of a material fact. If discovered after the insured's death, this omission can lead to claim denial, particularly during the contestability window. However, legal defenses may apply. For example, if the other policy was small, recently lapsed, or not in force at the time of the new application, it may be possible to argue that the omission was not material. Moreover, if the insurer did not follow up on ambiguous or incomplete answers, or issued the policy without clarification, they may have waived the right to later void the contract. An experienced life insurance attorney can help beneficiaries make these arguments and reverse the denial.
Legal Help for Misrepresentation and Non-Disclosure Denials
Our firm routinely handles life insurance claim denials involving income misstatements, omitted policies, and other alleged application issues. We understand how insurers use the contestability period and misrepresentation claims to avoid payouts—and we know how to fight back. Whether your loved one’s claim was denied by Banner Life or another major carrier, we can review the policy, application, and denial letter to determine whether you have grounds for appeal or litigation. In the recent $130,000 recovery, we demonstrated that the income discrepancy was minor and non-material, and that the policy had been approved despite readily available evidence that contradicted the insurer’s denial rationale. That kind of legal strategy can make all the difference when challenging a denied life insurance claim.
If your life insurance claim was denied due to income issues or non-disclosure, contact our top-rated life insurance attorneys for a free consultation. We get results—and we don’t get paid unless you do.
FAQ: Life Insurance Denials for Income Misrepresentation and Policy Non-Disclosure
Can a life insurance policy be denied because of incorrect income listed on the application?
Yes, insurers may deny a claim if they discover the policyholder provided false or inflated income information. Income affects eligibility and the amount of coverage allowed, so misrepresenting it is considered a material misstatement that may void the policy.
Is it considered fraud to estimate income rather than report exact figures?
Not necessarily. If the applicant made a good faith estimate and had inconsistent or fluctuating income, it may not rise to the level of fraud. The key factor is whether the misstatement was intentional and material to the underwriting decision.
Does lying about income always result in a denied claim?
No, a misrepresentation must be material. If the insurer would have issued the policy anyway, even at a different benefit amount or premium, the claim denial may be challenged.
What if the insurer knew the income wasn’t accurate but approved the policy anyway?
If the insurer had access to conflicting information or failed to verify the applicant’s income, they may have waived their right to deny the claim based on that misstatement.
Why do insurers ask about other life insurance policies?
Insurance companies ask about existing coverage to assess their total risk exposure. The applicant’s total life insurance coverage across all policies helps determine if the new policy is financially justified.
Can a claim be denied for failing to mention another small policy?
Yes, even small omissions can lead to denial if the insurer deems the information material. However, if the other policy had a minimal benefit or had lapsed, legal arguments may be made that the omission was not significant.
Is non-disclosure of another life insurance policy considered fraud?
It can be, especially if the omission was intentional and influenced the insurer’s decision to issue the policy. However, honest mistakes or misunderstandings may not constitute fraud.
Can I fight a denial based on non-disclosure of another policy?
Yes, if the omission was not material, not intentional, or if the insurer failed to clarify vague responses, an attorney may be able to challenge the denial and recover the full benefit.
What if the other policy was purchased after the one in question?
Only policies in force at the time of the new application need to be disclosed. Policies obtained later generally should not impact the validity of the original application.
Can an insurer deny a claim years after the policy was issued?
Typically no. After the two-year contestability period, insurers can only deny claims based on proven fraud. Minor errors or omissions are not enough once the policy is incontestable.
How do insurers uncover income misstatements or undisclosed policies?
Insurers may review credit reports, public records, tax documents, and medical databases after a claim is filed. These investigations often occur during the contestability period.
What is the contestability period in life insurance?
It is a period—usually two years from policy issuance—during which the insurer can review the application for misstatements and deny claims for material inaccuracies, even unrelated to the cause of death.
What is required for a misstatement to be considered material?
A misstatement is material if it would have changed the insurer’s decision to issue the policy or affected the policy’s terms. Materiality is often central in denial disputes.
What is rescission of a life insurance policy?
Rescission is when the insurer cancels the policy as if it never existed, typically due to misrepresentation or fraud. It voids coverage and eliminates the insurer’s obligation to pay the claim.
Can an insurance agent be held responsible for application errors?
Possibly. If an agent filled out the application incorrectly or gave misleading advice, there may be grounds for a claim against them or the insurer under agent misconduct theories.
What type of evidence helps reverse a denial?
Helpful evidence may include emails, tax documents, financial records, or proof that the insurer should have known the information was inaccurate before issuing the policy.
Is legal help necessary to contest a denied claim?
Yes, these cases are complex and insurers have experienced legal teams. Hiring a life insurance attorney greatly increases the chances of reversing a denial based on misrepresentation.
What if the insured forgot about a small existing policy?
If the omission was unintentional and the policy was insignificant, an attorney may argue that it was not material and should not void the claim.
What should I do immediately after receiving a denial letter?
Preserve all documents, avoid giving additional statements to the insurer, and contact a qualified life insurance lawyer to review your legal options.
How long do I have to contest a life insurance denial?
Deadlines vary by state, but typically you have 1–2 years to file a lawsuit. Acting quickly is essential to protect your rights.