Our life insurance attorneys successfully recovered a $50,000 death benefit after American United Life wrongfully denied a group life insurance claim. The policy was provided through the insured’s employer, and the denial stemmed from administrative confusion involving employment status and beneficiary records. After a detailed legal review and direct intervention, the insurer reversed its position and paid the full benefit.
This case highlights a recurring problem in employer provided life insurance plans. Administrative mistakes by employers or insurers frequently lead to denied claims, even when coverage should clearly apply.
Why Group Life Insurance Claims Are Denied More Often Than Private Policies
Group life insurance policies operate very differently from individually purchased life insurance. Because employers act as intermediaries, errors occur more frequently and accountability becomes blurred.
Employer Administration Creates Risk
In employer sponsored plans, the employer often controls enrollment, premium deductions, beneficiary records, and eligibility tracking. When these tasks are mishandled, insurers may deny claims by blaming employment status changes, paperwork gaps, or outdated records.
Common employer driven errors include:
Failure to properly enroll the employee
Incorrect classification of employment status
Missed premium deductions
Lost or unprocessed beneficiary change forms
Failure to notify employees of conversion or portability rights
In private policies, these risks are reduced because the insurer deals directly with the policyholder.
ERISA Changes the Legal Landscape
Most employer provided life insurance policies are governed by federal ERISA law rather than state contract law. This significantly affects how denials are challenged.
Key differences under ERISA include:
Mandatory administrative appeals before filing suit
Strict deadlines for appeals and lawsuits
Limited discovery rights
Courts often defer to the insurer’s interpretation
By contrast, private life insurance disputes are governed by state law and allow broader remedies, including bad faith damages in many jurisdictions.
Underwriting Differences Matter
Group life insurance typically involves little or no medical underwriting for base coverage. Employees are often automatically enrolled or offered coverage during open enrollment with minimal health disclosures.
Private policies involve detailed applications, medical exams, and lifestyle disclosures. As a result, misrepresentation denials are far more common with private policies, while administrative denials dominate group plan disputes.
Conversion and Portability Are Frequent Failure Points
Group life insurance coverage usually ends when employment ends unless the employee converts or ports the policy. Many denials occur because:
Employees were never informed of conversion rights
Deadlines were unclear or missed
Employers failed to send required notices
Insurers accepted premiums but later claimed coverage ended
Courts often rule in favor of beneficiaries when employers fail to provide proper notice or continue accepting premiums.
Beneficiary Errors Are Especially Common in Group Plans
Beneficiary designations in group policies are often maintained through employer HR systems or benefits portals. These records are more prone to errors than privately maintained policies.
Problems frequently include:
Beneficiary changes submitted but never processed
Conflicting records between employer and insurer
Outdated beneficiaries remaining on file
Employer failure to forward updated forms
In the American United Life case, beneficiary record confusion played a central role in the denial until corrected through legal action.
How We Challenge Group Life Insurance Denials
When a group life insurance claim is denied, we focus on:
Reviewing the full policy and summary plan description
Examining employer payroll and enrollment records
Identifying notice failures regarding conversion rights
Proving continued coverage through premium acceptance
Holding insurers accountable for ERISA violations
Many group policy denials collapse once the administrative record is properly built and challenged.
Help for Denied Employer Provided Life Insurance Claims
Group life insurance denials often look final but are not. Administrative errors, employment status disputes, and beneficiary confusion are among the most frequently overturned denial grounds.
Our firm routinely handles denied employer provided life insurance claims nationwide, including ERISA governed plans and non ERISA group policies. If your claim was denied because of employment status, enrollment issues, or employer error, the denial deserves immediate legal review.
We work on a contingency fee basis. You pay nothing unless we recover benefits for you.