A common but overlooked reason for denied life insurance claims is a breakdown between the employer and the insurance company involving evidence of insurability, often called EOI. In these cases, the employee completes the required health forms, the employer collects them, and then the file is never transmitted to the insurance carrier.
After the insured dies, the insurer denies the claim by stating that no evidence of insurability was ever received or approved.
Attorney Christian Lassen represents beneficiaries nationwide in denied and delayed life insurance claims.
What the EOI Process Is Supposed to Do
Evidence of insurability is required when an employee elects life insurance coverage above a certain threshold. The insurer uses this process to evaluate health risk before approving the additional coverage.
In a typical process:
The employee elects higher coverage during enrollment
The employee completes EOI forms
The employer or benefits platform collects the forms
The forms are transmitted to the insurer for underwriting
The insurer approves or denies the additional coverage
If any step fails, the coverage may never be activated.
Where the Breakdown Happens
In these denial cases, the failure usually occurs after the employee has done everything required.
Common scenarios include:
HR collects the EOI forms but never sends them to the insurer
The benefits portal stores the forms but does not transmit them
A third party administrator fails to include the file in a data transfer
The insurer receives incomplete data and cannot match it to the employee
The file is lost during a system migration or vendor change
When the insurer later reviews its records, it may show no EOI on file.
The Denial After Death
When a claim is submitted, the insurer checks whether the coverage above the guaranteed issue limit was approved.
If the insurer has no record of EOI approval, it may deny the additional coverage and state:
no evidence of insurability was received
the underwriting process was never completed
coverage above the guaranteed issue limit was never effective
This often results in a partial payment or full denial of the expected benefit.
Why Employees Believe Coverage Was Active
Employees typically assume that once they complete the EOI forms and submit them to HR or the benefits system, the process is complete.
That belief is reinforced when:
HR confirms receipt of the forms
The employee completes the forms through the employer’s portal
Payroll deductions begin for the higher coverage amount
No follow up request or rejection is received
From the employee’s perspective, everything appears to be in order.
Payroll Deductions Add to the Confusion
In many of these cases, the employer deducts premiums for the higher coverage amount even though the insurer never approved it.
This creates a strong expectation that the coverage is active.
However, insurers often argue that payroll deductions do not establish coverage if the underwriting requirement was never satisfied.
Conflicting Records Between Employer and Insurer
These disputes frequently involve conflicting documentation.
For example:
The employer’s records may show that EOI was completed and stored in the system.
If a life insurance claim was denied because the insurer says no evidence of insurability was received, legal review may help determine whether the EOI was submitted and whether the failure to transmit or process it caused the denial.