Life Insurance Claims Denied Due to Misrepresentation: Does the Insurance Company Need to Prove Intent to Deceive?
Life insurance claims can be denied due to misrepresentation on the application, but whether the insurer must prove intent to deceive can depend on the state and specific circumstances. In some states, an insurer must prove that the policyholder intentionally provided false information with the intent to deceive the insurer. In others, a misrepresentation may result in a claim denial without the need for the insurer to demonstrate intent. It’s crucial to understand how misrepresentation works in your state, as the burden of proof can vary.
The Role of Misrepresentation in Denied Life Insurance Claims
Misrepresentation occurs when the policyholder provides false or incomplete information on the life insurance application. This can include failure to disclose relevant information about medical conditions, lifestyle habits, or even personal details like age or occupation. When a misrepresentation is made, the insurer may claim that the policy was issued under false pretenses and void the policy or deny the death benefit.
Material Misrepresentation vs. Intent to Deceive
A material misrepresentation is one that would have affected the insurer’s decision to issue the policy. For instance, failing to disclose a pre-existing medical condition like heart disease or providing incorrect information about smoking habits can be considered material misrepresentations. If such a misrepresentation is discovered after the insured’s death, the insurer may seek to deny the claim, but the intent to deceive is a key factor in the determination.
States Requiring Proof of Intent to Deceive
In some states, insurers are required to prove that the policyholder made a material misrepresentation with the intent to deceive the insurer before they can deny the claim. In these cases, it is not enough to show that the policyholder made a false statement; the insurer must also prove that the false statement was made intentionally to mislead the insurance company.
1. California
In California, insurers must prove that the policyholder made a misrepresentation with intent to deceive the insurer and that the misrepresentation was material to the decision to issue the policy. If intent to deceive cannot be proven, the insurer may not void the policy, but the death benefit could be reduced to reflect the coverage that the insured would have been eligible for if accurate information had been provided.
2. New York
New York law requires insurers to prove that the misrepresentation was made with intent to deceive and that the misrepresentation was material to the underwriting decision. However, if the policyholder can demonstrate that the misrepresentation was unintentional, the insurer may be required to return the premiums paid, rather than voiding the policy.
3. Florida
Florida has a similar requirement where the insurer must prove that the misrepresentation was willful, material, and made with the intent to deceive the insurer. However, if the misrepresentation was made more than two years before the insured's death, the insurer must show that the misrepresentation was still material to the risk at the time the policy was issued.
States Where Intent to Deceive May Not Need to Be Proven
In some states, insurers can deny claims for misrepresentation without needing to prove intent to deceive. If the misrepresentation is so blatant that no reasonable person could have made it innocently, the court may infer intent to deceive. These cases often involve misstatements that are so obvious or egregious that they leave little room for a reasonable explanation.
Additionally, some states have laws that allow for the automatic forfeiture of a policy if any misrepresentation occurs, regardless of intent. This means that even if the misrepresentation was unintentional, the insurer may be able to void the policy and deny the death benefit.
The Impact of Misrepresentation on the Claims Process
Insurance companies have a duty to investigate life insurance claims and ensure that the policy was valid at the time of the insured's death. If the insurer suspects that a misrepresentation was made, they will often conduct a thorough investigation to determine if the policy should be voided or if the claim can be paid. Misrepresentation of facts related to health, occupation, or lifestyle can significantly affect the claims process, and insurers may deny claims or reduce the payout.
How Life Insurance Lawyers Can Help with Claims Denied Due to Misrepresentation
If your life insurance claim was denied due to misrepresentation, whether or not intent to deceive needs to be proven, it’s important to seek legal guidance. A skilled life insurance attorney can:
Review the application and identify if the misrepresentation was truly material or made with intent to deceive
Challenge the insurer’s denial if intent is not properly proven or if the misrepresentation was unintentional
File an appeal with the insurer and gather additional evidence, such as medical records or witness statements, to support your claim
Represent you in court if necessary, to ensure that your rights are protected and that the insurance company meets its obligations
Our firm has successfully handled claims denied due to misrepresentation and intent to deceive. We have helped clients recover death benefits in cases involving Primerica Life, MassMutual Life, John Hancock Life, and AFLAC Life, among others.
Frequently Asked Questions
What is a material misrepresentation in life insurance?
A material misrepresentation is a false statement on the life insurance application that would have influenced the insurer’s decision to issue the policy. Examples include failing to disclose a pre-existing health condition or providing incorrect information about lifestyle habits.
Do insurance companies always need to prove intent to deceive?
No. In some states, insurers need to prove intent to deceive for a denial based on misrepresentation. However, in other states, blatant misrepresentation may be sufficient to void the policy without needing to prove intent.
What happens if the insurer cannot prove intent to deceive?
If the insurer cannot prove intent to deceive, the policy may not be voided. However, the insurer may still be able to reduce the death benefit to reflect the coverage the insured would have been eligible for if accurate information had been provided.
Can I challenge a life insurance claim denial based on misrepresentation?
Yes. If your claim was denied due to misrepresentation, you can file an appeal with the insurer and seek legal help to challenge the denial, especially if you believe that the misrepresentation was unintentional or not material.
What should I do if my life insurance claim is denied?
Request a written explanation from the insurer, review the policy’s exclusions, and appeal the decision if necessary. If the appeal fails, consider consulting a life insurance lawyer to discuss legal options.
Can life insurance policies be voided due to misrepresentation of occupation?
Yes. If the insured misrepresents their occupation, especially if it is a high-risk occupation, the insurer may deny the claim based on misrepresentation, especially if the occupation was material to the underwriting process.
Do I need an attorney if my life insurance claim was denied for misrepresentation?
Yes. Misrepresentation cases can be complicated, and having an experienced life insurance lawyer can significantly improve your chances of overturning the denial and recovering the full benefit.