Whether you reside in: Passaic; Brick Township; Cherry Hill; Clifton; Trenton;
Hamilton Township; Toms River; Lakewood Township; Woodbridge Township;
Edison; Elizabeth; Paterson; Jersey City or Newark; our life insurance
attorneys who live and work here in New Jersey are here to help resolve
your delayed or denied life insurance claim.
Many of the people who hold life insurance policies also have what is known
as an Accidental Death & Dismemberment (“AD&D”) rider.
AD&D riders typically provide for a dramatically increased death benefit
payout if the policyholder dies in any sort of accident. In the event
the insured dies from an illness or intentional injury, however, the life
insurer does not have to pay the AD&D benefit.
Given that AD&D riders have such large payouts, it is not surprising
that life insurance companies frequently try to avoid their obligation
to pay by claiming that the insured’s death was not an accident.
Indeed, they do this all the time – even in cases where the insured’s
autopsy report specifically lists cause of death an “accident.”
Such was the case for the family of one woman from New Mexico. This article
explores the long fight they had to endure just to get the AD&D benefit
their daughter intended for them. Notwithstanding ample evidence that
the daughter’s death was an accident, the life insurance company
deemed it not to be so and refused to pay the policy benefit. Fortunately,
the beneficiaries found a lawyer who specialized in life insurance claim
denials, sued the insurance company, and ultimately beat the insurer at
its own game.
The case involved a 34 year-old flight attendant named Teresa. Through
her employer, Teresa received a life insurance policy with an AD&D
rider worth $300,000. One fall morning, Teresa was found dead in her home
in New Mexico. Given her youthful age and relative good health, her death
was deemed suspicious and an investigatory autopsy was performed.
The physician who performed the autopsy ruled her death to be an accidental
overdose from low-grade prescription pain killers. He noted that while
a person would normally need a blood concentration three times greater
than Teresa’s in order to suffer a fatal overdose, her blood levels
were just at the threshold of what
might be lethal for a person of her size.
Teresa’s parents, Mary and Bob, were the beneficiaries under Teresa’s
life insurance policy. Shortly after her death, they made a claim for
benefits with Teresa’s life insurance company, including a $300,000
claim under the AD&D rider. The insurance company neither paid or
denied the claim. Rather, they undertook a prolonged secondary investigation
into the cause of Teresa’s death.
That investigation revealed that two months before her death, Teresa had
suffered a seizure. A brain scan showed no determinative cause for the
seizure, but did note the presence of a severe sinus infection. A CAT
scan also revealed that Teresa had a slightly enlarged spleen. While this
condition can be the result of prolonged drug abuse, there was no indication
in the medical records that Teresa’s drug use was suspected or even
discussed by medical professionals.
Additional investigation revealed that Teresa was not known to suffer from
depression. She had never sought medical or psychiatric treatment for
any mental health issues. She had no history of suicide attempts or ideation.
Family and friends described her as happy and hopeful about the future.
She did, however, misuse prescription painkillers on a regular basis.
As a result of the investigation, the life insurance company eventually
denied Mary and Bob’s claim for benefits under the AD&D rider.
The insurer claimed the evidence they gathered proved that Teresa’s
death was self-inflicted (i.e., not an accident).
Mary and Bob had access to the same evidence, and they thought the insurance
company’s denial was ludicrous. Thus, they sought the counsel of
an attorney who specialized in contesting denials of life insurance claims.
After an initial consultation and review of the relevant records, the
attorney recommended that the couple sue their daughter’s life insurer.
The crux of Mary & Bob’s case was that Teresa’s death was
an accident – as noted by her autopsy report. As such, they argued,
they were entitled to receive the $300,000 AD&D payout their daughter
had specifically intended for them.
In its defense, the life insurance company relied heavily on the results
of its secondary investigation. It argued that 2 months before she died,
Teresa had learned of her enlarged spleen – a condition that could
have been caused by her drug abuse. Given that she didn’t stop using
drugs in light of that diagnosis, the insurance company claimed that she
intended to harm herself and that intentional harm was a sufficient reason
to deny the AD&D claim.
The case made its way up to the United States Court of Appeals for the
Seventh Circuit. Ultimately, the court ruled entirely in favor of Mary
and Bob and ordered the life insurer to pay them the full $300,000 AD&D
benefit, plus interest.
Of particular importance to the court was the complete lack of evidence
showing that Teresa’s medical providers discussed with her the connection
between drug abuse and her spleen condition. The court also relied on
the fact that Teresa’s blood levels were far from what could be
a lethal dose of the drug she ingested. That, combined with her generally
healthy outlook on life, led the court to believe Teresa was not taking
the pills with the intent to harm herself. Quoting from an earlier case,
the court explained its logic nicely:
As attorneys who specialize in the denial of life insurance claims, we
see life insurers try to avoid paying AD&D claims based on a “self-inflicted
harm” theory all the time. We know these companies hate how expensive
AD&D claims are to pay and we know that they’ll stop at nothing
to try to avoid them. We also know how to successfully beat them in court.
If you believe you have had a life insurance claim wrongfully denied on
this basis, call us. We’re here to help.
When people think about life insurance, many assume it is an investment
into one’s own life that returns tenfold at the death of the individual
named in the policy. Although this might seem accurate, it is a bit more
intricate than that.
Can a Life Insurance Company Refuse To Pay?
The vast majority of life insurance policies are paid promptly, within
a month of the insurer receiving a death certificate. Usually, all they
have to do is verify the death of the insured, verify that the policy
was in force at the time of death, and that the claimant is actually a
beneficiary on the policy.
But there are some circumstances in which a life insurance company can
delay, reduce or deny a claim. Common examples of such circumstances include
• Death as a result of illegal drug use
• Death during commission of a felony
• Death from a cause excluded by the policy
• Suicide (within a two-year contestability period)
• Material misrepresentation or omission on a life insurance application
• Undisclosed felony convictions on the life insurance application
• Policy not in force at time of death
• Death in a hangliding accident when the insured stated he did not
It’s frustrating when this happens: Obviously the family of the deceased
has already been traumatized by the death. The receipt of a denial letter
from a life insurance company can be a severe emotional setback, and can
obviously be financially devastating for survivors.
If that happens to you, don’t give up without a fight. With competent
legal representation, many of these initially-denied claims are overturned.
Insurance companies make mistakes like everybody else. Usually, when confronted
by an experienced attorney with solid evidence that they are in the wrong,
they quickly pay the claim, or offer a favorable settlement. Most of our
cases are resolved within two weeks of us contacting the insurance carrier.
Life Insurance Bad Faith Cases
Sometimes life insurance companies try to pull a fast one to avoid paying
a legitimate death benefit. They have been caught using various bad-faith
ploys and tactics to delay or deny claims, betting that beneficiaries
won’t get legal representation and therefore won’t even realize
that they have a case.
Misrepresentation of policy provisions.
Insurance agents have been caught misrepresenting policy provisions to
owners and beneficiaries. If this happens, you may have a bad-faith case
against the insurance carrier and the insurance agent. Agents generally
carry errors and omissions insurance policies that help protect their
clients and beneficiaries against professional errors and misrepresentations
– so this can be an additional area for your attorney to explore.
Improper reliance on exclusions. An insurer may try to deny a claim because
the death happened because of an excluded activity. But this doesn’t
always hold up in court – especially if the exclusion language in
the policy was vague or ambiguous. For example, many policies contain
exclusions for death as a result of mountain climbing accidents. The carrier
may see from police or medical records that the insured died as a result
of a fall on a hiking trip, and try to deny the claim.
But hiking is not mountain climbing. The burden of proving that the cause
of death was a policy exclusion is on the insurance company – not
on the beneficiary. Courts generally resolve contract ambiguities in favor
of the beneficiary.
Here’s another example: Generally, life insurance companies have
a right to refuse to pay a death benefit if the insured commits suicide
within a two-year period. But sometimes suicide is difficult for the life
insurance company to prove. They may fail to properly investigate a case,
or misclassify an accidental overdose of legal prescription medications
or a homicide as a suicide. But again, the burden of proof is generally
on them. If you, with the help of a skilled attorney, can build a reasonable
case that the death was not, in fact a suicide or other excluded cause
of death, you may have an excellent chance of prevailing.
Insurance companies are entitled to investigate death claims. Fraud prevention
and deterrence is an important part of making sure life insurance is affordable
for families of all income levels. But life insurance companies must not
delay payment of death claims unreasonably.
Normally, they pay death benefits within 30 days of receiving a death certificate
and other claim documentation. Some quality carriers pay much faster,
if there are no reasons to suspect the cause of death was excluded under
the policy or there is no evidence of misrepresentation or omission in
If they do investigate, and take longer than 30 days to pay, the insurer
should be able to show that there is genuine and reasonable cause for
further investigation, or to require further documentation, given the
totality of circumstances. They also have to complete any investigation
in a reasonable period of time.
Sometimes, insurers will drag out correspondence, hoping that you will
miss an important deadline for appeal. This can happen with employee benefit
insurance policies covered under ERISA, which imposes a 60-day deadline
to initiate an appeal.
If a claim is delayed longer than 30 days, you should have a letter explaining
exactly why. If the delay is unreasonable, or if the letter is unclear
to you, it’s time to contact an attorney.
Wrongful cancellation and rescission
After two years, insurance carriers cannot rescind a policy unless they
can demonstrate material misstatements on the application.
Occasionally, insurers try to avoid paying a legitimate death claim by
resorting to these illegal, bad-faith practices:
o Denying the existence of a policy, or
o Falsely claiming that the policy had expired or lapsed
o Attempts to change the terms of a policy without the consent of the policy owner
o Attempts to deny coverage based on misrepresentations on the policy that
are not, in fact, material to the decision to issue the policy
If the insurance company acted in bad faith, you may be able to recover
additional damages, over and above the death benefit of the policy. It’s
important to work with an experienced attorney who specializes in life
insurance law from the outset to maximize your chances of prevailing.
In any event, it’s critical to get legal advice early in the process
– preferably as soon as you receive a notice of denial or delay
of a life insurance benefit. Involving an experienced attorney early helps
you preserve your rights, meet important deadlines, and maximize your
If you’ve received a denial or delay letter from a life insurance
company, now’s the time to call us for a free consultation. Call
us day or night at 800-900-2521. The call could be worth hundreds of thousands
of dollars – and even millions – to you down the road. Don’t
risk it all trying to go it alone.
How to appeal a denied life insurance claim
It’s rare, but it happens: A beneficiary notifies a life insurance
company that the insured has died – provides a death certificate
and all other required information – only to receive a letter in
the mail with the devastating news that the claim has been denied.
Can they do this? In certain circumstances, yes. But many bereaved beneficiaries
have successfully challenged life insurance companies, and received the
full amount to which they were entitled.
What to do when you receive a denial letter
Act fast. Delaying your appeal or contest can cost you rights later.
For example, if the life insurance is an employee benefit, there may be
a 60-day ERISA-imposed deadline for filing and contesting. The sooner
you act, the better your chances of prevailing, and missing this deadline
can ruin your chances of prevailing.
Contact an attorney. Life insurance law is complicated and specialized.
It’s best by far to choose an experienced attorney licensed in your
state who makes life insurance law a significant part of his or her practice,
with years of experience in the field. With hundreds of thousands or even
millions of dollars at stake, you can’t afford to be a learning
vehicle for an inexperienced attorney.
By contacting an experienced attorney right away, you may be able to save
a lot of time and effort later, and avoid accidentally harming your case
by saying or writing something you shouldn’t have.
Find out precisely why the claim was denied. Ideally an attorney will
handle this communication for you. If you are doing it yourself, consider
going through your state’s insurance commissioner’s office,
and have them lodge the query for you.
Common reasons an insurance company may attempt to deny or reduce a claim include:
Material misrepresentations on an application
Material omissions of fact on an application
Death from an excluded cause
Suicide (within the 2-year ‘contestability’ period)
Allegations of drug or alcohol abuse
Missed claim deadline
Lapsed, cancelled or expired policy
Misrepresentation of age or income
Allegation that the insured was engaged in criminal activity at the time of death
Denial because of a disappearance that may not be as a result of death
Denial because the claimant is not, or is no longer a beneficiary on
the life insurance contract
Beneficiary contest or dispute
We say they may attempt to deny, because not every attempted denial holds
up in court. For example, a life insurance company may try to claim that
an omission on a life insurance application was material, but a judge
or jury may find that the omission was not material at all – or
that it should lead to a modest reduction in the death benefit paid, rather
than an outright denial of the entire claim.
Often, a well-worded and reasoned letter from an experienced attorney can
convince the insurance company that it is not likely to prevail, and they
will pay the claim, or at least make a reasonable compromise offer.
Gather documents. Start putting together all the key documents needed to
support your case right away. Depending on the circumstances, you may
need the following:
Life insurance policy contract
Copy of the life insurance application
Medical records of the insured
Marriage license or birth certificates of beneficiaries
Trust documents, if the beneficiary is a trust
Proof of employment
Proof of income (W-2s, 1099s, or tax returns of deceased)
Records of premiums paid
File an appeal. An appeal is generally the first step in resolving a denied
or reduced life insurance benefit payout. This is simply an elevation
of the case to a higher level of review within the insurance company itself.
If the insurer obviously violated its own procedures or violated the terms
of the life insurance contract in denying the claim, you have a good chance
at prevailing at this level.
Each carrier has its own procedures, and there may be a deadline. Read
the life insurance policy documents and your denial letter carefully and
make sure you meet the deadlines. It’s always better to win an appeal
than to be forced to file a lawsuit later.
Contest the decision. If the appeal process doesn’t work, the next
step is usually to contest the decision administratively, via your state’s
insurance commission. These state bodies are regulatory authorities, and
they have the ability to fine insurance carriers and even revoke their
right to sell insurance within their jurisdictions. Insurers want to stay
on their good sides, and don’t like getting into hot water with
This doesn’t mean the insurance commission will force the carrier
to pay a genuinely invalid claim. But building a solid case can win the
day, or at least convince the insurer to settle quickly on a borderline case.
File a lawsuit. A lawsuit, and going to trial, is almost always the last
resort. But the amounts at stake mean that taking a good claim to court
may be worthwhile.
If there’s a chance of a claim going to trial, having a good, experienced
attorney on your side from the very beginning is a must. The insurance
company will certainly have some extremely capable and experienced lawyers
on their side who live and breathe life insurance cases, and they aim to win.
They can and will seize on any little mistake, misstatement or ambiguity
on your part to their advantage. To have a reasonable case of prevailing,
you will need the same level of expertise and experience in life insurance
law on your side.
Caution: Don’t accept an attempt to return premiums, or any other
offer in compromise without speaking with an attorney. When a life insurance
company smells trouble with a denied claim, they may attempt to refund
all the premiums paid to the policy owner or beneficiary. This is a sneaky
attempt to void the contract. Accepting the payment could harm your ability
to collect down the road.
Life insurance and non-traditional relationships
If your intended beneficiary is anyone other than a legally-recognized
heir, you need to be extra careful
In the United States today, adult citizens enjoy a wide diversity of relationships.
Gone are the days when the only unions recognized legally are those of
husband and wife. In most states, for example, gay marriage has been expressly
recognized as a legal union. Moreover, in 2015, the United States Supreme
Court ruled that same-sex marriage is a right that exists throughout the land.
The legal implications of that decision and the simultaneous cultural shift
were vast. One area in particular that has been impacted is life insurance.
Before the widespread legal recognition of same-sex unions, life insurance
was a critical aspect of estate planning for gay and lesbian couples.
So long as the policyholder named his or her significant other as the
designated beneficiary, the surviving partner would receive a death benefit
payout after the policyholder died.
Today, gay and lesbian couples have more traditional options available
for estate planning. Nonetheless, case law that developed prior to widespread
recognition of same-sex unions can teach us a lot about the importance
of being thorough in life insurance applications – as well as the
significant implications that arise if you fail to do so.
In this article, we discuss some traps to watch out for if you plan to
name someone other than a legally recognized heir as your life insurance
beneficiary. As lawyers who specialize in wrongful denial of life insurance
claims, we frequently contest denials of claims from beneficiaries who
are non-legal heirs. Much of our knowledge in this area, however, comes
from cases that were decided before gay marriage was a widely-recognized
What do you mean by a non-legal heir?
When someone passes away without a will, probate courts are often called
upon to determine who should inherit the deceased’s estate. While
inheritance laws differ from state to state, inheritance principals usually
award the estate proceeds in the following order:
1. To the deceased’s legal surviving spouse, if she had one;
2. If there is no legal surviving spouse, then to the deceased’s
surviving children, if she had any;
3. If there is no legally surviving spouse and no surviving children, then
to the deceased’s surviving parents;
4. If there is no legally surviving spouse, no surviving children, and
no surviving parents, then to the deceased’s surviving siblings;
and so on.
The same principal applies if someone dies with a life insurance policy
in place but that policy fails to name a designated beneficiary. The life
insurer has to make a payout to someone. In most cases, that beneficiary
will be determined based on the same inheritance principles outlined above.
Why does it matter?
These inheritance rules were particularly harsh on gay couples prior to
the legal recognition of same-sex marriages. One infamous case out of
Pennsylvania involved a gay couple named Philip and Albert. Philip was
a college professor and Albert had been his partner for many years. The
two lived openly as a “married” couple, even though same-sex
unions were not legally sanctioned in Pennsylvania at that time.
The college Philip was employed by offered a group life insurance plan
for employees. When Philip met with the plan administrator to enroll in
the policy group, he told the administrator he wanted Albert to be his
designated beneficiary. For whatever reason, the administrator failed
to write Albert’s name into the form, instead leaving the beneficiary
designation blank. No one ever caught the omission.
Philip later died and Albert made a claim for death benefits under the
life insurance policy. The insurance company denied Albert’s claim
outright. The insurer’s justification was twofold: (1) technically,
the policy did not list a named beneficiary; and (2) since Pennsylvania
did not recognize Albert as a legal spouse, the policy benefits legally
had to go to Philip’s legal next of kin (in this case, his parents).
This prevented Albert from using the policy benefits to pay off the mortgage
on the couple’s home, as they had planned for years prior to Philip’s death.
Why does this matter now that same-sex marriages are legal?
Notwithstanding the extensive legalization of same-sex marriages, Philip
and Albert’s situation is still instructive. Let’s face it,
people don’t always intend for their legal kin to be beneficiaries
under a life insurance policy. For example, some people want their best
friend to obtain the policy payout. Others wish for the money to go to
a specific charity. The options are endless.
In each of these cases, however, the same risk exists that Albert faced
when Philip passed away. If, for whatever reason, the intended beneficiary
is not named in the policy, there’s a good chance that person’s
claim for policy benefits will be denied.
This is another reason why it is so important to retain the services of
an attorney specializing in life insurance claim denials any time you
are faced with a denial of coverage. Depending on which state you live
in, there may be evidence from outside the policy that allows you to prove
you are the intended beneficiary. The variables are too vast to mention
here. Suffice it to say, however, that trying to take on an insurance
company without a qualified lawyer could be a big mistake.
If you’ve been in the life insurance game for as long as we have,
you know that life insurers will use every trick in the book to deny coverage.
Put simply, life insurance companies don’t make impressive profits
by unabashedly paying out claims. They put a lot of time and effort into
concocting various reasons for denying coverage to otherwise deserving
If you’re facing the denial of a life insurance claim for any reason
whatsoever, please don’t hesitate to contact our firm to discuss
your case. We have made it our life’s mission to successfully contest
wrongful claim denials. We’re not intimidated by insurance companies,
their lame justifications for denials, or their army of lawyers.
Our highly-experienced life insurance lawyers handle both delayed and denied
life insurance claims. We will take your phone call day or night for a
Contact us today