Navigating Life Insurance Claim Denials: Essential Steps to Take

Purchasing life insurance is a wise decision. For either a lump-sum premium or a small monthly payment, a person can provide loved ones with financial protection in the event of their death. Many families rely on these payouts to survive financially. Most often, the insurance company will pay the claim without hesitation. However, there are also cases in which the insurer will deny payment for a reason that is not legitimate. When this happens, a life insurance lawyer can help you fight back and get the payout your loved one intended to receive.

Why Do Life Insurance Claims Get Denied?

Life insurance companies are driven by the goal of generating profits. They make money when they collect premiums and deny claims or delay paying death benefits. These companies employ various reasons to justify the denial of life insurance claims, including the following:

• Period of contestability: All life insurance policies have a period of contestability, usually two years. If an insured person dies during this period, the insurer can investigate the application for fraud, misrepresentation, or other issues to deny a claim. This is one reason to hire a life insurance lawyer quickly if you suspect a claim was wrongfully denied. 

• Suicide or other excluded causes of death: Life insurance policies often contain a list of exclusions, which are specific causes of death that are not covered by the policy. Suicide is a common exclusion, along with death resulting from acts of war or terrorism.

• Denial for material misrepresentation: This implies the policyholder has lied about or hidden information that is key to the proper issuance of coverage.

• Lapse of coverage denials: As with any insurance, failing to pay premiums can result in a lapse of coverage. This means that beneficiaries will not be eligible for death benefits, and the policy is forfeited.

What Should My Family Do if My Life Insurance Claim is Denied?

When a claim is denied, many family members get demotivated and some may even give up the pursuit of the benefits they are entitled to. However, it is within their rights as life insurance beneficiaries to fight the life insurance claim denial by filing a complaint or an appeal if they disagree with the denial reason. Here are the steps for beneficiaries to take in the event a life insurance claim is denied:

• Contact the insurer. In cases where denial letters lack specific details, reach out to the insurance company and request a thorough explanation for the denial. Ensure you inquire about the appeal process, if available, and gather the necessary information to file an appeal. 

• Contest the rejection. If you believe you have a strong case, contest the decision directly with the insurer. This process can be both affordable and challenging, particularly while coping with the grieving process.

• Consult a life insurance lawyer for an appeal. Engaging the services of a life insurance claim lawyer can enhance your chances of recovering the claimed benefits. A lawyer for a life insurance claim will possess the knowledge of applicable laws and the expertise to appeal the denial on your behalf.

Protect Your Beneficiaries from a Life Insurance Claim Denial

To ensure that your beneficiaries do not encounter claim rejections when you pass away, there are a few steps you can take now:

• Automate your payments: Set up automatic premium payments to avoid missing any bills and ensure that your coverage remains active. This will prevent any lapses in the policy due to missed payments.

• Be honest in your application: When applying for your life insurance policy, be completely transparent and truthful. Disclose all relevant health information and avoid concealing any details that could impact the policy's validity.

• Keep your policy up-to-date: After significant life events such as marriage or the birth of a child, review and update your policy accordingly. Make sure your beneficiaries are current and their contact information is accurate.

• Share your plans: It is important to communicate with your beneficiaries about your life insurance coverage. Inform them about the existence of the policy, where to locate the policy documents, and how to file a claim when the time comes. This will help them navigate the process smoothly.

By taking these proactive measures, you can provide peace of mind and facilitate a seamless claims experience for your loved ones.

Working with a Lawyer for Life Insurance Claims

When facing a denied life insurance claim, clients often question the validity and legality of the denial. Life insurance law is highly specific to the facts of each case, with unique nuances that differentiate one case from another. Therefore, it is crucial to seek the guidance of a life insurance lawyer who can thoroughly review the details of your situation and provide you with straightforward legal advice.

At HHP Law Group, our insurance claim lawyers can help you understand your life insurance beneficiary rights and determine how to act when a claim is denied. We provide the support and legal counsel you need throughout your claim journey, such as:

• Explanation of how to file a life insurance claim

• Explanation of the contents of the denial letter

• Assistance in writing and filing a life insurance appeal 

• Reviewing your case and explaining what your legal options are 

• Creating effective strategies both in and outside of the courtroom

We help subjects of insurance claim denials recover the legacy their loved ones left for them. If you are the beneficiary of a life insurance policy and your claim for benefits has been denied, contact us today. Time is limited and the sooner you appeal the denial with the help of a life insurance lawyer, the better the potential result.