When a life insurance company says a claim is under “fraud investigation,” families often assume something serious has been uncovered. In reality, fraud investigations are one of the most common delay tactics insurers use when they do not want to make a decision. These investigations can last months, sometimes more than a year, even when there is no evidence of wrongdoing.
Insurers know that beneficiaries are vulnerable after a death. By labeling a claim as suspicious, they gain time, leverage, and control. Understanding how these investigations work is the first step toward challenging an improper delay.
Below are the thirteen most common ways insurers use fraud investigations to stall payment.
1. Flagging the Claim Based on Automated Risk Scores
Many insurers use algorithms to flag claims for fraud review. These systems often rely on incomplete or outdated data. Once flagged, the claim enters a lengthy investigation even if nothing is actually suspicious.
2. Requesting Documents They Already Have
Insurers often ask for medical records, police reports, or applications that are already in their possession. This creates the appearance of an active investigation while buying more time.
3. Claiming They Need More Time to Review the Application
Insurers frequently say they must compare the application to medical records. This is a standard process, but they often stretch it far beyond what is reasonable.
4. Delaying While They Search for Old Medical Records
Insurers sometimes request medical records from decades earlier, even when those records have no relevance to the cause of death. This can delay the claim for months.
5. Repeatedly Asking for Clarifications
Insurers may ask the same questions multiple times or request clarifications that do not change the outcome. These repetitive requests are designed to extend the investigation.
6. Conducting Interviews That Are Not Necessary
Insurers often schedule interviews with beneficiaries, doctors, employers, or friends. These interviews rarely uncover anything new but can delay the claim significantly.
7. Waiting for Toxicology or Autopsy Reports Even When Not Relevant
Insurers sometimes insist on waiting for toxicology results even when the policy is not an accidental death policy. This is a common delay tactic.
8. Reviewing Social Media for “Suspicious Activity”
Insurers may comb through social media accounts looking for anything they can label as inconsistent. This process can take weeks and often produces nothing meaningful.
9. Claiming They Need to Investigate Financial Motives
Insurers sometimes say they must investigate whether the beneficiary had a financial motive. This is rarely relevant unless foul play is suspected, but it is often used to justify delays.
10. Sending the Claim to a Special Investigations Unit
Once a claim is sent to a special investigations unit, it often stalls. These units are known for slow processing and broad investigative authority.
11. Delaying While They Verify Employment or Income
Insurers may claim they need to verify employment status or income, even when the policy does not depend on these factors. This is another way to extend the timeline.
12. Claiming They Need More Time to Review Third Party Data
Insurers often rely on pharmacy databases, MIB reports, and other third party sources. They may claim these reports are delayed or incomplete, which can stall the claim.
13. Using the Investigation to Pressure Beneficiaries
Some insurers use the investigation to pressure beneficiaries into accepting a lower settlement or withdrawing the claim. The longer the delay, the more desperate families become.
Why Fraud Investigations Often Lead to Improper Delays
Fraud investigations are supposed to be used only when there is legitimate evidence of misrepresentation or wrongdoing. Instead, insurers often use them to:
• Avoid making a timely decision
• Search for reasons to deny the claim
• Pressure beneficiaries
• Extend the contestability period
• Shift the burden onto grieving families
These tactics are not always lawful, especially when the insurer fails to communicate clearly or provide a reasonable timeline.
What Beneficiaries Should Do Immediately
If your claim is stuck in a fraud investigation, you should request:
• A written explanation of what is being investigated
• A list of all outstanding documents
• A timeline for completion
• Copies of all correspondence
• The claim file if the delay becomes unreasonable
These steps help prevent the insurer from dragging the investigation out indefinitely.
We Challenge Improper Fraud Investigations Nationwide
Our firm regularly handles life insurance claims that have been stalled under the label of fraud investigation. These cases are often winnable once the insurer is forced to justify its delays.
If your claim is stuck in a fraud investigation, contact us for a free case evaluation.