A $130,000 life insurance claim denied by Banner Life was recently overturned by our firm, resulting in a full recovery for the beneficiary. The denial was based on alleged misrepresentations made during the application process, a common tactic insurers use to void policies within the two-year contestability window. We challenged the insurer’s claim, arguing that the discrepancies were immaterial and did not justify withholding benefits. This case highlights a critical issue in life insurance litigation: minor application errors are frequently exploited by insurers to justify denials. If you need a Texas life insurance denial attorney call us.
When Minor Misstatements Lead to Major Life Insurance Claim Denials
Life insurance companies often rely on seemingly insignificant application discrepancies to deny claims after the insured’s death. In many cases, these denials are not related to the cause of death but stem from alleged misrepresentations about financial status, existing coverage, or health disclosures. During the contestability period typically the first two years after a policy is issued, insurers have broad authority to investigate and rescind policies based on any inaccuracies they consider “material.” Even if the insured died in an unrelated accident, the company may point to a misreported income figure or an omitted policy to avoid paying. Below are several common denial triggers we routinely see and challenge:
Misstated Income: More Common Than You Think
A frequent reason for denial is income inflation or inconsistency. In the Banner Life case, the insurer claimed that the insured had exaggerated their annual income, arguing that this misrepresentation distorted the underwriting process. Insurers use income figures to determine the appropriate coverage amount if someone overstates their earnings, they might qualify for a larger death benefit than they should. However, income can fluctuate, and many applicants estimate or round figures. Unless the insurer can prove that the error was intentional and material, courts are often reluctant to uphold such denials. In our case, we demonstrated that the discrepancy was minimal and that Banner Life had access to financial documentation during underwriting, making the denial legally indefensible.
Omission of Other Policies: A Legal Gray Area
Failing to disclose an existing life insurance policy is another common reason for claim denial. When applicants apply for new coverage, they are typically required to list all active policies. This information helps insurers ensure that total coverage across all carriers is not excessive compared to the insured’s financial position. But many people forget to mention older or small-value policies, especially if they were purchased years earlier. If a death occurs during the contestability period, an insurer may argue that the omission was a deliberate attempt to deceive. In some cases, however, the other policy was no longer active, had lapsed before the application date, or was issued by a company the applicant did not recall. In these situations, courts may rule that the omission was immaterial and does not warrant denial. Our attorneys have successfully reversed denials where clients were unaware of outdated policies issued decades earlier.
Health History Omissions: Intent Versus Error
Another denial trigger involves medical disclosures. For example, if an applicant fails to mention a past diagnosis or hospitalization, the insurer may rescind the policy, claiming that the omission prevented proper risk assessment. However, memory lapses, confusing application language, or incomplete medical records can all lead to unintentional errors. In one recent case, a claim was denied because the insured did not disclose a minor surgery from 12 years earlier. We showed that the surgery was unrelated to the cause of death and that the medical records were accessible to the insurer at the time of underwriting. The court ruled that the omission was not grounds for denial.
Mismatched Application Signatures or Agent Errors
Sometimes, errors originate with the insurance agent. If an agent fills out an application incorrectly or rushes through the process without confirming details, the applicant may not even realize something was misrepresented. Courts have recognized that insurers may be liable if their own agents contributed to the mistake. For instance, we recently represented a family whose claim was denied due to a misspelled name and missing signature on a supplemental health questionnaire. We obtained email correspondence showing that the insurer’s representative had handled the submission, and the court found the insurer could not use its own error to justify denial.
Legal Strategies That Work in Misrepresentation Disputes
Successfully contesting a life insurance denial based on misrepresentation requires a combination of legal insight and factual investigation. In the Banner Life case, our attorneys reviewed all application materials, policy documents, and underwriting communications. We found that the alleged misstatement did not affect the issuance of the policy and that Banner Life had waived its right to contest by approving the policy despite red flags. Our firm has handled hundreds of such cases, including:
A $250,000 policy denied by Lincoln Financial due to unreported asthma; claim paid after we showed asthma was not linked to cause of death
A $500,000 policy with Prudential denied over misstated height and weight; settled in full after deposition revealed the agent entered the data
A $200,000 claim from John Hancock denied for failure to disclose a $25,000 group plan; reversed after we showed the group policy had terminated
These outcomes demonstrate that beneficiaries should never accept a denial at face value. Misstatements are often exaggerated by insurers and do not always justify nonpayment.
Why Legal Help Is Crucial in Misrepresentation Denials
When facing a denied life insurance claim, especially one involving alleged misrepresentations, you need an experienced legal team. Insurance companies have entire departments dedicated to contesting claims and rescinding policies. Beneficiaries often receive lengthy denial letters filled with legal jargon, policy excerpts, and references to “material misstatements” that can be misleading or inaccurate. Our attorneys know how to dissect these denials, identify weaknesses in the insurer’s argument, and present a compelling case for payment. We do not charge upfront fees and only get paid if we recover money for you.
If your loved one’s life insurance claim was denied by Banner Life or another carrier, contact us for a free consultation. We may be able to recover the full death benefit, just as we did in this $130,000 Banner Life case.