Having multiple life insurance policies might seem like a wise way to maximize financial protection for your loved ones. In many cases, it can be. But when the existence of other policies is not disclosed or when the total coverage exceeds what insurers deem “reasonable,” it can lead to denied claims leaving grieving families with nothing. At LifeInsuranceAttorney.com, our life insurance lawyers regularly handle these denials and win. We’ve successfully resolved claims from insurers including Prudential, MetLife, MassMutual, Nationwide, Liberty Mutual, and many more.
Why Failing to Disclose Other Policies Can Lead to a Denial
Life insurance companies evaluate risk and set policy limits based on the applicant’s income, financial responsibilities, and existing coverage. Most applications specifically ask whether the applicant has other life insurance policies in force or pending. This question isn’t just administrative it directly affects underwriting decisions.
Failing to disclose additional policies may be seen as material misrepresentation, even if the omission was unintentional. This is especially relevant during the two-year contestability period. If a claim is filed during this period and the insurer finds undisclosed policies, they may argue that they would not have issued the policy—or would have done so with different terms had they known the full picture. That gives them legal grounds to deny the claim.
Real Denial Cases Involving Multiple Life Insurance Policies
Case 1: Tanner’s Undisclosed Policies
Tanner, a 52-year-old businessman, had accumulated three separate life insurance policies over the course of a decade: a $500,000 term life plan, followed by two additional policies worth $750,000 and $1 million. When he passed away, one insurer denied the claim after discovering that Tanner had failed to disclose the other two policies when applying for the third. The insurer viewed this omission as material and denied the claim. Our firm has handled similar denials involving Zurich, Mutual of Omaha, Corebridge, Globe Life, and others, pushing back against insurers who use technicalities to avoid payouts.
Case 2: Olivia’s Excessive Coverage
Olivia, a 45-year-old executive, purchased five policies from different insurers, believing she was safeguarding her family. However, when she died of cancer, two insurers denied the claims. They argued that the total value of her coverage was far above her income level and financial responsibilities. They claimed that if her existing coverage had been disclosed, they would have reduced or declined the applications. We’ve seen similar denials from companies like TIAA, American Family, John Hancock, and Ohio National, where we successfully argued that policy approval decisions cannot be reversed posthumously based on vague “insurability limits.”
Case 3: Michelle’s Honest Mistake
Michelle, age 60, applied for a new life insurance policy and forgot to mention a small $15,000 policy she had taken out many years earlier. The new insurer later uncovered the older policy and claimed she had misrepresented her insurance status. Despite the small size of the forgotten policy, the company denied the claim. We were able to challenge this denial by demonstrating that the omission was immaterial and did not affect the insurer’s decision to issue the policy.
How Life Insurance Companies Investigate Multiple Policies
When a claim is filed, especially during the contestability period, insurers conduct a deep investigation. This includes:
Accessing prescription and medical databases
Reviewing income and employment records
Checking for previously issued or pending life insurance policies
Comparing the application to third-party underwriting data
If anything seems inconsistent especially if the applicant failed to list other policies the insurer may argue that the misrepresentation was material and invalidate the policy. Our attorneys review every part of the claims process and challenge denials that are based on speculative or retroactive logic.
The Risk of Exceeding Insurability Limits
Each insurance company sets informal limits on how much total life insurance a person can reasonably hold based on their income and debts. If a 40-year-old earning $70,000 per year applies for $3 million in total coverage across multiple carriers, insurers may see this as excessive. If the applicant fails to disclose overlapping policies, the insurers may accuse them of stacking policies beyond insurable interest. This can result in denied claims or reduced payouts.
We help beneficiaries navigate these disputes and have secured claim approvals even when coverage amounts exceeded industry norms. Recent cases have involved Jackson National, Manulife, Equitable Life, AXA Life, and more.
How Our Life Insurance Attorneys Handle These Denials
We know how to fight and win life insurance claim denials based on multiple policy issues. Our legal team:
Reviews all policy applications and supporting documents
Compares alleged misstatements to policy language and case law
Evaluates whether the omission or over-insurance truly influenced underwriting
Assembles financial records and expert opinions to show the insured was insurable
Prepares detailed appeal letters and legal briefs to challenge the denial
If necessary, we escalate the case to litigation. Many insurers settle once we demonstrate that their denial lacks legal merit or was based on an overly aggressive interpretation of the application. If you need a Nebraska life insurance lawyer we can help.
FAQ About Life Insurance Denials Involving Multiple Policies
Can you legally have multiple life insurance policies?
Yes, it’s legal. But you must disclose all active and pending policies on each new application to avoid future claim denials.
Why do insurers care about other policies?
They assess your total coverage to determine financial justification and insurability. Failure to disclose policies may be viewed as deceptive.
What is insurability, and why does it matter?
Insurability refers to how much coverage you’re eligible for based on your income and financial obligations. Insurers may deny claims if they believe the total amount is excessive.
What if I simply forgot to mention another policy?
Even honest mistakes can result in denials. However, we often argue that the omission was immaterial and didn’t influence underwriting.
Can a claim be denied if I didn’t disclose a small policy?
Yes. But we can fight these denials by showing that the undisclosed policy was insignificant and wouldn’t have affected the insurer’s decision.
Do all insurers ask about other policies?
Most do, especially in the application’s health and financial sections. Leaving this information blank or incomplete can raise red flags later.
What if the policies were purchased over many years?
You still must disclose any active policies. If an older policy lapsed or was terminated, it typically doesn’t need to be reported.
How do insurers discover other policies?
They use data from the MIB Group (Medical Information Bureau), third-party underwriting services, and application comparisons to uncover undisclosed coverage.
Is there a limit to how much life insurance I can buy?
There’s no legal cap, but insurers set practical limits based on income, age, and financial need. Trying to exceed those limits may lead to denial or reduced benefits.
What can I do if my claim was denied for undisclosed policies?
Contact a life insurance attorney immediately. We’ll analyze your case and prepare a comprehensive appeal or lawsuit if needed.
Contact us today for a free consultation.
All content on this page and site written by Christian Lassen, Esq.