$104,250 AuguStar Life Insurance Denial Reversed in Favor of Beneficiary
Our life insurance law firm is pleased to announce a successful recovery of $104,250 in life insurance proceeds that were wrongfully denied by AuguStar Life Insurance. The insurer originally refused to pay the claim, citing a vague policy exclusion that, upon review, did not apply to the actual circumstances of the insured's death. After a detailed investigation and aggressive legal advocacy by our attorneys, the denial was overturned, and the full benefit was paid to the rightful beneficiary. This case is yet another reminder that many denials are not final—they can be fought and reversed with the right legal support.
Lesser-Known Life Insurance Exclusions That Frequently Lead to Claim Denials
Life insurance policies often include exclusions that are not well understood by policyholders or their beneficiaries. These provisions are sometimes buried in fine print and can be used by insurers to avoid paying valid claims.
Understanding these lesser-known exclusions is key to recognizing when a denial may be improper and when legal action may be necessary. Here are four of the most commonly misunderstood exclusions that insurers use to deny life insurance benefits:
1. Undisclosed High-Risk Activities or Hobbies
Hobbies such as base jumping, skydiving, off-road motorcycling, scuba diving, or private aviation are considered high-risk by life insurers. If a policyholder fails to disclose participation in these types of activities on their application, even if they don’t die while engaging in them, the insurer may still assert that the omission was material and void the policy.
We’ve handled several cases where insurers tried to deny claims based on unclear lifestyle questions or application responses that were taken out of context. In many cases, the questions were vague or the risk level was never properly assessed by the insurer at the time of underwriting.
2. Suicide During the Policy’s Exclusion Period
Most life insurance policies contain a suicide exclusion clause, typically lasting for the first 12 to 24 months after the policy goes into effect. If the insured dies by suicide during this period, the insurer may only return premiums paid and deny the full benefit. However, this exclusion is often invoked even in cases where the official cause of death is listed as accidental, ambiguous, or undetermined.
Insurers may aggressively investigate suspicious deaths during this timeframe, looking for any evidence that might suggest suicide—even in the absence of a clear psychological history or intent. If your loved one passed away during the suicide exclusion period and the insurer is relying on circumstantial evidence to deny the claim, it may be worth pursuing a legal review.
3. Misrepresentation or Omissions on the Application
Life insurance applications require full disclosure of medical history, prescriptions, lifestyle, and past diagnoses. If any of this information is missing or inaccurately stated, the insurer may assert material misrepresentation, particularly during the contestability period (the first two years of the policy). They may then attempt to rescind the policy and refuse to pay out.
However, not all inaccuracies justify a denial. The insurer must prove that the misrepresented information was material to their decision—meaning they would not have issued the policy or would have issued it under different terms. Even when misstatements exist, many denials can be overturned if the omissions were unintentional or unrelated to the cause of death.
4. Death Involving Criminal Acts or Illegal Behavior
Another frequently used exclusion applies when a policyholder dies while engaging in a criminal act. This could include involvement in a robbery, a high-speed chase, or other illegal activities. But insurers sometimes apply this exclusion far too broadly. We’ve seen claims denied because the insured was merely present at a crime scene, or due to unproven allegations of misconduct.
To apply this exclusion, insurers must usually demonstrate a direct connection between the illegal act and the cause of death. Suspicion or association alone should not be enough. A thorough legal review of the facts and the policy language can often reveal a path to overturning such denials.
What to Do If Your Life Insurance Claim Has Been Denied
If you receive a denial letter from a life insurance company, take the following steps immediately to preserve your rights and increase your chances of reversing the decision:
Request the full denial letter and all supporting documentation used to make the decision
Carefully review the policy, including the definitions and exclusions section
Act quickly, especially if the denial occurs during the contestability or suicide exclusion period, where timing matters
Do not provide additional statements to the insurer without speaking to legal counsel
Consult a life insurance attorney experienced in challenging denials based on exclusions, misrepresentation, or cause-of-death disputes
Our firm regularly helps clients navigate denials involving complex policy language and vague exclusions. We’ve successfully challenged insurers who cited high-risk hobbies, alleged misstatements, or policy exclusions that didn’t align with the facts.
National Life Insurance Claim Dispute Attorneys Ready to Help
Whether your claim was denied due to an obscure exclusion or you’re dealing with an interpleader lawsuit, our legal team is here to help. We’ve reversed denials from AuguStar Life, Confederation Life, Bankers Life, Erie Life, AAA Life, and many more. Every denied claim we handle receives personal attention and a strategic legal plan designed to secure a full payout. If you need life insurance claim help in Idaho we can help.
Frequently Asked Questions
What is a life insurance exclusion clause?
An exclusion clause limits the circumstances under which a death benefit will be paid. Common exclusions include suicide during the first two years, deaths from illegal acts, intoxication, or participation in risky activities.
How can I find out why my life insurance claim was denied?
The insurer is required to provide a written explanation. Request the full denial letter and ask for copies of all documents they used to make their decision, including the policy and application.
Is a denial based on misrepresentation always valid?
No. For a misrepresentation to justify denial, it must be material—meaning the insurer would have issued the policy differently or not at all if they had known the truth. Minor or unrelated errors may not justify a claim denial.
What is the contestability period in life insurance?
It’s typically the first two years after a policy is issued. During this time, the insurer can investigate the application for misstatements and attempt to void the policy if they find material inaccuracies.
Can life insurance be denied if the insured was involved in a crime?
Yes, but only if the death was directly caused by criminal activity. Simply being present at the scene or accused of wrongdoing is usually not enough to enforce an exclusion.
What happens if a claim is denied due to suicide during the exclusion period?
If the insurer has evidence that the death was suicide during the exclusion window, they may deny the claim. However, if the death was accidental or there is no conclusive evidence of suicide, the claim may still be payable with legal assistance.
Can you fight a denial if the insured didn’t disclose a high-risk hobby?
Yes. Many application questions are vague, and not all omissions are material. If the death didn’t occur during the activity, the insurer’s reasoning may be weak.
Does your firm handle denials from AuguStar Life and other major insurers?
Yes. We have successfully reversed denials from AuguStar Life and many others. Our legal team is familiar with their tactics and how to challenge them effectively.
What is an interpleader lawsuit in life insurance?
It’s when the insurer is unsure who the rightful beneficiary is and deposits the policy funds with the court. We represent beneficiaries in these lawsuits and fight to ensure our clients recover the benefits they’re entitled to.
How much does it cost to hire your firm?
We work on a contingency basis. That means you pay nothing unless we recover the denied benefit. We also offer free consultations to evaluate your case.