Owning more than one life insurance policy is legal and, in many cases, financially prudent. Many people purchase coverage over time as their income grows, families expand, or financial obligations increase. However, when insurers discover multiple policies after a death, they sometimes use that fact as a basis to deny a claim.
At LifeInsuranceAttorney.com, we regularly represent beneficiaries whose claims were denied because the insured had more than one life insurance policy. These denials are frequently based on alleged non-disclosure, over-insurance arguments, or post-claim underwriting theories. Many of them are legally flawed and can be overturned.
Why Insurers Focus on Multiple Policies After a Death
Most life insurance applications ask whether the applicant has existing or pending life insurance coverage. Insurers use this information to assess financial justification and underwriting risk. Problems arise when an insurer claims that other policies were not fully disclosed or that the total amount of coverage exceeded what they now consider reasonable.
After a death, insurers often revisit underwriting decisions with the benefit of hindsight. During this post-claim review, they may argue that had they known about other policies, they would have declined coverage, reduced the policy amount, or issued different terms. This argument is commonly raised during the contestability period but is also asserted outside it in some cases.
The key legal question is not whether other policies existed, but whether any omission was material and whether it actually influenced the underwriting decision at the time the policy was issued.
Non-Disclosure Allegations and Material Misrepresentation
Insurers frequently claim that failing to disclose other life insurance policies constitutes material misrepresentation. This argument is often overstated.
To deny a claim on this basis, the insurer must generally prove that:
• The application clearly asked about other policies
• The insured provided an inaccurate or incomplete answer
• The omission was material to the underwriting decision
• The insurer relied on that information when issuing the policy
Many denials fail on one or more of these elements. Applications are often vague, poorly worded, or limited to certain types of policies. In other cases, the insurer had access to third-party underwriting databases and could have discovered the additional coverage before issuing the policy.
Over-Insurance and “Excessive Coverage” Arguments
Another common denial tactic involves claims that the insured held too much total life insurance relative to income or financial obligations. Insurers refer to internal guidelines or informal insurability limits to justify denial.
These arguments are often weak. Insurability guidelines are not policy terms, and insurers cannot retroactively impose underwriting limits after accepting premiums and issuing coverage. Courts routinely reject attempts to rescind policies based on subjective, post-death assessments of what coverage amount seems reasonable.
The existence of multiple policies does not invalidate coverage unless the policy itself clearly limits aggregate insurance or the insurer can prove intentional deception.
Common Multiple Policy Denial Scenarios
We regularly see denials arise from situations such as:
• Policies purchased over many years as income increased
• Small older policies forgotten during later applications
• Group life insurance not understood to require disclosure
• Policies issued by different insurers with overlapping coverage
• Inconsistent application questions between carriers
In many cases, the insured did not intend to conceal coverage and had no reason to believe disclosure was incomplete or misleading.
How Insurers Discover Other Policies
After a claim is filed, insurers often conduct extensive investigations that include:
• Reviewing Medical Information Bureau data
• Checking underwriting exchange databases
• Comparing applications across carriers
• Reviewing financial and employment records
These tools are available to insurers during underwriting as well. When an insurer fails to use them until after a death, it weakens any argument that the alleged omission was truly material.
How We Challenge Multiple Policy Denials
Our legal approach focuses on enforceability, not insurer assumptions. We evaluate:
• The exact wording of the application questions
• Whether disclosure obligations were clear and unambiguous
• Whether the insurer had access to the information pre-issuance
• Whether the alleged omission actually affected underwriting
• Whether contestability limits apply
• Whether the insurer waived objections by issuing the policy
We also use financial records, underwriting standards, and expert analysis to demonstrate that the insured was insurable and that the coverage was justified at the time of issuance.
Many insurers reverse denials once confronted with the legal weaknesses of their position. Others resolve claims through settlement after litigation begins.
Important Legal Reality for Beneficiaries
Multiple life insurance policies do not automatically justify denial. Insurers bear the burden of proving material misrepresentation and reliance. They cannot deny claims based on internal guidelines, hindsight reasoning, or speculative underwriting theories.
If your claim was denied because the insured had more than one policy, legal review is critical. These denials are often procedural disputes disguised as fraud allegations.
If you need a Nebraska life insurance lawyer to review a denied claim involving multiple policies, we are ready to help.
Frequently Asked Questions About Multiple Policy Denials
Is it legal to have more than one life insurance policy
Yes. There is no legal limit on the number of policies a person may own.
Can insurers deny claims for non-disclosure of other policies
Only if the omission was material, clearly asked about, and relied upon in underwriting.
What if the insured forgot about a small policy
Minor or immaterial omissions are often not sufficient grounds for denial.
Do insurers set coverage limits
They use internal guidelines, but those are not binding policy terms.
Can policies issued years apart cause problems
They can be questioned, but issuance over time often strengthens the argument that coverage was justified.
How do insurers discover undisclosed policies
Through underwriting databases, application comparisons, and post-claim investigations.
Does the contestability period matter
Yes. Insurers have more leverage during the first two years, but still must prove materiality.
Can these denials be appealed
Yes. Many are overturned through appeal or litigation.
Final Perspective
Life insurance exists to provide certainty, not post-death second guessing. The presence of multiple policies does not erase contractual obligations or years of premium payments.
Denials based on undisclosed or allegedly excessive coverage are frequently reversible when challenged properly. With experienced legal advocacy, beneficiaries can and do recover the benefits their loved ones intended them to receive.