$50,000 Denied Life Insurance Claim Successfully Resolved
We’re proud to report the successful resolution of a $50,000 life insurance claim that was wrongfully denied. The claim involved a group life insurance policy provided through the insured’s employer. Initially, the insurer refused to pay based on administrative confusion over employment status and beneficiary records. After a comprehensive legal review and intervention by our firm, we were able to have the denial reversed and the full benefit paid to our client. This case highlights a key issue in life insurance litigation: the significant differences between challenging employer-sponsored group life insurance claims and privately purchased policies.
How Do Employer-Provided Life Insurance Claim Denials Differ from Private Policy Denials?
While both types of life insurance offer financial protection, the process of challenging a denied claim can vary significantly depending on whether the policy was obtained through an employer or purchased privately. Understanding these differences can help beneficiaries and policyholders take the correct legal steps when a claim is denied.
1. Employer Involvement in Group Policies
When a life insurance policy is provided through work, the employer often acts as a middleman. They may handle enrollment, premium deductions, and even initial communication with the insurance company. This involvement can complicate things if the employer makes errors or fails to notify the employee of important rights like conversion or portability. With private policies, the insurer deals directly with the policyholder and beneficiaries, reducing the chances of third-party administrative mistakes.
2. Governing Law: ERISA vs. State Law
Most group life insurance policies are governed by ERISA (Employee Retirement Income Security Act), a federal law that supersedes many state protections. ERISA has strict procedural rules and tight deadlines for appeals and lawsuits, and courts often give deference to the insurer’s decisions. In contrast, private life insurance policies are typically governed by state contract law, which may provide broader rights to policyholders and beneficiaries.
3. Underwriting and Application Differences
Group policies often have limited or no medical underwriting, especially for basic coverage amounts. Enrollment is streamlined, with little to no health disclosures. Private policies, on the other hand, typically require medical exams, health questionnaires, and detailed personal information. As a result, misrepresentation denials are more common in private policies because insurers scrutinize health histories more closely.
4. Coverage Flexibility and Customization
Private life insurance policies allow greater flexibility in choosing coverage amounts, riders (like waiver of premium), and terms (e.g., 10-, 20-, or 30-year terms). Employer-provided policies often base coverage on salary multiples and may have caps on how much can be purchased without evidence of insurability.
5. Portability and Conversion Rights
Group life policies usually terminate when employment ends, unless the insured elects to convert or port the policy. Unfortunately, many employees are unaware of this right or miss the conversion deadline. Private policies remain in effect as long as premiums are paid and are not affected by job changes.
6. Premiums and Renewability
Group policies may offer lower premiums due to group rates, but they are generally not renewable or portable. Private policies may have higher premiums but offer the option to renew or convert to permanent coverage, preserving the benefit for a longer period.
7. Claims and Appeals Process
In ERISA-governed group plans, the appeals process must follow specific federal procedures, and claimants have limited time to file administrative appeals and lawsuits. For private policies, the appeals process is governed by state law and typically allows for broader discovery and legal remedies.
8. Policy Exclusions and Beneficiary Designations
Exclusions in group policies may be different or more limited than in private policies. Beneficiary designations in group policies are often handled by the employer’s HR department or online benefits portal, increasing the risk of outdated or improperly recorded designations. With private policies, the designation is typically managed directly through the insurer and may be more secure.
Let Us Help You Navigate Denied Life Insurance Claims—At Work or Privately Purchased
Whether your denied life insurance claim involves a group policy through work or a privately purchased plan, our firm has the legal knowledge and experience to fight back. We’ve successfully recovered benefits from group plans governed by ERISA, union-sponsored benefits, and individually underwritten policies from top insurers.
Our attorneys understand the nuances of group plan denials, conversion rights, portability disputes, and claims involving employer errors. We also handle complex private policy denials involving misrepresentation, contestability, and exclusions.
Frequently Asked Questions
What is the main difference between employer-provided and private life insurance policies?
Employer-provided policies are usually group plans with minimal underwriting and limited customization, often governed by ERISA. Private policies are individually underwritten, customizable, and governed by state law.
Can I challenge a denied group life insurance claim under ERISA?
Yes, but you must follow specific procedures. ERISA requires an administrative appeal within a short time frame (usually 60 or 180 days), and lawsuits must follow strict rules. Our attorneys handle ERISA appeals nationwide.
What happens to my group life insurance when I leave my job?
Coverage usually ends unless you port or convert it. If you’re not notified of these options or miss the deadline, you may still have legal grounds to challenge a denial—especially if your employer failed in their duty.
Why are private life insurance claims more likely to involve misrepresentation?
Because private policies require detailed health disclosures, the insurer may comb through the application during the contestability period and deny the claim if they find any inconsistency with medical records.
Is it harder to win a group life insurance appeal under ERISA?
ERISA appeals can be more challenging due to the deference courts give insurers and the limitations on discovery. However, our experienced ERISA attorneys regularly overturn wrongful denials.
Can I sue my employer if they mishandled a life insurance policy?
Possibly. If your employer failed to inform you about conversion options, enrolled you improperly, or gave incorrect information, you may have a claim under ERISA or state law, depending on the policy type.
Are group policies less reliable than private life insurance?
They’re more vulnerable to employment changes and administrative errors, but not necessarily less reliable. The key issue is often how the policy is managed and whether the insured is aware of their rights.
Do group life insurance policies require medical exams?
Usually not for base coverage amounts. Supplemental group coverage may require evidence of insurability, but the process is often easier than with private underwriting.
What if the employer didn’t submit the beneficiary change to the insurer?
This is a common problem. If the insured intended to change beneficiaries but the employer failed to process it, legal action may be needed to prove intent and secure payment to the rightful beneficiary.
How much does your firm charge to handle denied life insurance claims?
We work on a contingency fee basis, which means you pay nothing unless we win. Contact us for a free consultation to review your claim and discuss your options.