Many individuals place their trust in insurance agents to accurately guide them through the life insurance application process. While these professionals are supposed to assist applicants in securing coverage, there are instances where agent negligence or misconduct leads to devastating consequences. In fact, one of the most overlooked reasons for denied life insurance claims is agent error during the application process. At LifeInsuranceAttorney.com, we fight back when life insurance companies deny claims based on mistakes the applicant didn’t even make. Our law firm has successfully resolved countless agent error claims, delayed payouts, and beneficiary disputes, including life insurance interpleader lawsuits.
How Agent Errors Happen During the Application Process
Insurance agents act as intermediaries between applicants and life insurance companies. They are often responsible for completing application forms—sometimes in person, by phone, or even electronically. While many agents act professionally, there are far too many cases where an agent:
Rushes through paperwork
Fails to verify information with the applicant
Makes assumptions or guesses
Intentionally alters information to secure a policy approval or reduce premium cost
These actions can result in inaccurate applications that may seem harmless at the time but later become the basis for a denied claim.
Medical History Misrepresentation by Agents
One of the most common reasons for a claim denial is a misrepresentation of medical history. For example, if an agent completes the medical questionnaire and, either intentionally or through carelessness, marks “no” for conditions like high blood pressure, diabetes, or heart disease, the insurance company will later use this as justification to rescind the policy. The applicant may have verbally disclosed the condition, but if it isn’t recorded properly, the insurer will argue that the application was false—shifting the burden onto the grieving family.
Lifestyle Omissions and Risk Concealment
Agents may also skip or understate lifestyle questions to speed up the underwriting process or make the applicant more insurable. This includes failing to note:
Smoking or tobacco use
Alcohol consumption
Dangerous hobbies, such as scuba diving, rock climbing, or motor racing
Travel to high-risk countries
These omissions may not be flagged immediately, but when a claim is filed, the insurer will launch a full investigation, reviewing medical records, prescription history, and other sources. If inconsistencies are discovered, they may accuse the applicant of fraud—even if the agent was at fault.
Financial Misstatements by Insurance Agents
Another major area of concern involves financial disclosures. Life insurance underwriters rely on accurate income, asset, and debt information to determine how much coverage is appropriate. In some cases, agents will inflate the applicant’s income to qualify them for a larger policy or higher premium product. For example, a single mother earning $50,000 annually might be recorded as earning $100,000. Years later, the insurer may deny the claim on the basis that the policy was issued based on material misrepresentation, even if the applicant had no knowledge of the agent’s actions.
Clerical Errors: Names, SSNs, and Dates of Birth
Even seemingly minor errors—such as incorrect names, birthdates, or Social Security numbers—can derail a valid claim. In one real case, a father of two applied for a life insurance policy. The agent mistakenly entered the wrong SSN. When he passed away, the insurer denied the claim, stating they could not verify the policyholder’s identity. The burden then fell on the family to prove that a valid policy existed and that the error originated from the agent.
When Agent Errors Should Not Void a Life Insurance Claim
Insurance companies often claim that any inaccuracies in the application constitute fraud or misrepresentation, but this is not always legally sound. Our life insurance lawyers fight back by:
Proving the agent, not the applicant, made the error
Presenting evidence of verbal disclosures or written communications that contradict the application form
Arguing that the misstatement was not material to the issuance of the policy
Invoking legal doctrines such as waiver or estoppel where the insurer accepted the premium knowing of the issue
Demanding that the insurer provide audio recordings or agent notes that may reveal their role in the mistake
Our firm has won multiple cases where beneficiaries were initially denied due to so-called "applicant fraud"—only to uncover that it was the agent who mishandled the paperwork. Learn how to appeal a life insurance claim denial in Iowa
FAQ About Life Insurance Claim Denials Caused by Agent Errors
Can an insurer deny a claim based on an agent’s mistake?
They often try to—but legally, applicants should not be punished for errors made by an authorized insurance agent acting on the company’s behalf.
What if the agent lied or omitted information without my knowledge?
If you can prove that you disclosed the information and the agent failed to include it, you may still be entitled to receive the death benefit.
How can I prove the agent was responsible?
Email records, witness statements, call recordings, and even the agent’s own notes can help prove that the error was not made by the applicant.
What if the denial involves incorrect medical history?
This is the most common type of agent-related denial. We work with medical experts and review underwriting files to determine where the mistake occurred.
Do agents ever falsify income or financial information?
Yes. In an effort to increase the size of a policy (and their commission), agents sometimes inflate income. Insurers will use this against beneficiaries unless challenged.
Can a small error like the wrong SSN or name lead to a denial?
It can—but such denials are often successfully appealed once we show that the policy was valid and the error was clerical, not fraudulent.
What if the insurer claims the policy should never have been issued?
We often argue that if the insurer accepted premiums and failed to investigate known issues during underwriting, they waived their right to rescind.
Do I need a lawyer to fight these denials?
Absolutely. Insurers rarely reverse denials without pressure. We know how to expose agent errors and force them to honor the policy.
Do you handle all companies?
Yes. We fight agent-related denials from all life insurers, including State Farm, Globe, MassMutual, AIG, John Hancock, Primerica, and more.
What if the claim was delayed due to an agent error?
We handle both denied and delayed claims. Delays can be just as harmful and may lead to legal action for bad faith.