When a life insurance claim is denied, families often assume the dispute will follow a familiar path. In reality, the legal framework governing the policy can completely change how the denial must be challenged. One of the most important distinctions is whether the policy is governed by ERISA or FEGLI. These two systems operate under different federal laws, follow different appeal structures, and impose very different limits on what beneficiaries can recover.
Understanding which system applies is often the single most important factor in determining whether a denied claim can be overturned.
When you are facing a denied FEGLI claim, we are here for you. Look at our FEGLI Fact Sheet for more information.
The Core Difference Between ERISA and FEGLI Claims
ERISA applies to most private employer provided group life insurance policies. These are benefits offered through non government employers and regulated under federal employee benefits law. FEGLI applies only to federal civilian employees and is governed by a separate federal statute and administrative scheme.
While both are federal systems, they are not interchangeable. Each has its own rules regarding appeals, evidence, deadlines, and judicial review.
When you are facing a denied ERISA claim we are here for you. Look at our ERISA Fact Sheet for more information.
How Denials Arise Under Both Systems
Many denial reasons appear similar on the surface regardless of which system applies. Common allegations include missed premiums, lack of enrollment, beneficiary disputes, policy lapse, or alleged misrepresentation. What differs is how those allegations are evaluated and how beneficiaries are allowed to respond.
Under ERISA, the dispute usually centers on what is contained in the administrative record created during the claim and appeal process. Under FEGLI, the focus often shifts to whether OPM correctly applied federal regulations and whether beneficiary designations comply with strict statutory requirements.
ERISA Life Insurance Denials and Procedural Constraints
ERISA governed claims involve private insurers administering employer sponsored group plans. When a claim is denied, beneficiaries are typically required to complete one or more internal appeals before any lawsuit can be filed.
Deadlines are short and strictly enforced. Failure to submit a timely appeal can permanently bar the claim.
ERISA litigation has several defining features:
No jury trials
No punitive damages
No compensation for emotional distress
Judicial review limited to the administrative record
Courts generally apply a deferential standard of review when the plan grants discretionary authority to the insurer. This means the insurer’s decision can be upheld even if it is questionable, so long as it is not clearly unreasonable.
Because courts usually cannot consider new evidence after the appeal stage, the administrative record becomes the battlefield. Any missing documentation, medical clarification, or employer error must be addressed before the appeal is decided. Once the record closes, those issues are often lost forever.
FEGLI Life Insurance Denials and Federal Oversight
FEGLI claims follow a very different path. Coverage is provided through a federal program administered by OPM and serviced by a private carrier acting under federal authority.
When a FEGLI claim is denied, appeals are handled administratively through OPM. Beneficiaries must follow specific regulatory procedures and comply with strict deadlines. The process is document driven and often rigid.
Judicial review of FEGLI decisions is limited. Courts typically defer to OPM’s interpretation of the governing regulations unless the decision clearly violates the statute or exceeds agency authority. This deference can make FEGLI denials particularly difficult to overturn once OPM issues a final decision.
Beneficiary Designations and Federal Preemption
One of the most common and controversial issues in both ERISA and FEGLI claims involves beneficiary disputes.
Under ERISA, plan documents generally control, even if they conflict with state divorce or probate laws. Some state protections are preempted, while others may still apply depending on the facts.
Under FEGLI, federal preemption is often absolute. The most recent valid beneficiary designation typically governs, even if it names an ex spouse and even if state law would otherwise revoke that designation after divorce. This can lead to outcomes that feel unfair but are legally enforceable.
Because of this, interpleader actions are common in both systems when multiple parties claim entitlement to the proceeds.
Common Scenarios Where ERISA and FEGLI Denials Diverge
Certain situations highlight the practical differences between the two systems.
Employer enrollment errors
Under ERISA, employer failures to submit enrollment or premiums may be challenged through plan administration and equitable arguments. Under FEGLI, coverage is strictly tied to federal records and elections.
Job changes and coverage assumptions
ERISA claims may allow limited arguments based on employer representations. FEGLI coverage typically ends strictly according to federal rules, regardless of what the employee was told.
Divorce and outdated beneficiaries
ERISA outcomes depend on plan terms and limited exceptions. FEGLI outcomes almost always follow the last valid designation on file.
Alleged misrepresentation
ERISA claims are evaluated within the administrative record. FEGLI misrepresentation issues are handled under federal regulations and agency interpretation.
Why Strategy Matters From the Beginning
ERISA and FEGLI claims both punish delay and procedural mistakes. Missed deadlines, incomplete submissions, or incorrect assumptions about applicable law can permanently foreclose recovery.
In ERISA cases, failure to build a strong administrative record often results in an automatic loss in court. In FEGLI cases, failure to comply precisely with OPM procedures can end the claim before it ever reaches a judge.
When Legal Guidance Is Especially Important
These cases are not interchangeable. An approach that works under ERISA may be ineffective or harmful in a FEGLI case. Understanding which system applies determines:
Where appeals must be filed
What evidence matters
What arguments are allowed
What remedies are available
For beneficiaries, the difference can mean the difference between recovery and a final denial.
If a life insurance claim is denied under either ERISA or FEGLI, early action matters. These systems are unforgiving, but they are not unbeatable. With the right procedural strategy, many denials can be challenged and overturned.