Were you unjustly denied benefits from a life insurance claim? Life insurance is supposed to be a safety net in the event of a loved one’s passing, but unfortunately, some people have a difficult time obtaining the payments they deserve. We know how disheartening it can be when you are denied the funds meant to cover funeral expenses, debts left behind by the decedent and other expenses resulting from someone’s death.
A failure to pay life insurance claims may be considered an act of bad faith by the insurance provider. In essence, they are withholding benefits that rightfully belong to the beneficiary of a policy. Along with outright denials, the company can also use delay tactics, pay less that what the beneficiary is owed, or insist that someone other than you is the rightful beneficiary.
Rather than fighting with the insurance company on your own, please take a moment to contact the life insurance lawyers of Normandie Law Firm. We can help you with a case of insurance bad faith and secure the benefits that are rightfully yours.
Laws that Apply to Life Insurance Benefits
As a general rule, dispute over life insurance are governed by state laws if the policy was purchased privately. If the policy was provided through the decedent’s job, they are normally governed by a federal law knows as ERISA (Employee Retirement Income Security Act).
State and federal laws on life insurance differ considerably, so it’s essential to figure out which laws apply to your dispute over an unpaid life insurance claim. An experienced ERISA life insurance lawyer at our office can help you with these issues and plan the best legal strategy to recover your benefits.
Reasons Why a Claim for Life Insurance Benefits May be Denied
Frankly, there are many reasons that can cause a life insurance claim to be denied, so it would be impossible to cover them all in this article. However, here are some of the most common examples of reasons that are used by insurance companies to deny payment to a beneficiary:
Lacking Documentation – Essentially, the insurance company is saying that you failed to provide the required documentation to prove that you are the legal beneficiary. In cases of bad faith by an insurer, this may be a ruse to confuse and frustrate the beneficiary so that they drop the claim altogether.
Material Misrepresentation – To put it simply, the insurance company will argue that the policy holder deliberately withheld information or lied about their insurability. For example, the decedent may have withheld that they were diagnosed with a specific form of cancer before they applied for the policy. However, there are plenty of cases where the company will latch onto a minor error on the application, like the exact date of when the insured last saw their doctor. This, in itself is not a valid reason to deny a claim under the rule of material misrepresentation.
Evidence of Insurability – Some companies require EOL, or evidence of insurability, stating that the claimant’s health is good enough to be approved for insurance coverage. Normally, the applicant would have to answer health questions, submit information about their medical history, and be examined by a doctor. But insurance companies have been known to start taking premiums without bothering to check if the EOL is on file. Then, when the policy holder dies, they use the lack of evidence to deny a life insurance claim. Since this is the fault of the insurance provider, they are still obligated to pay the beneficiary what is required according to the policy terms.
Incontestability – even if a policyholder misrepresented information on the application, the insurance company has a limited period of contestability to investigate information that’s provided by the insured. If the company fails to do so within this period of time, they can no longer deny a claim based on a misrepresentation. To put it another way, an insurance company cannot take premiums from your loved one for years, then say that the policy is invalid because they didn’t research the applicant’s claims until they passed away.
Lapse in Coverage – Also known as a failure to pay premiums, coverage lapse is the most common reason for claim rejections when a life insurance policy holder dies. Of course, if the policy holder did miss payments, that’s a valid reason to deny a claim. But there are regulations regarding notices that have to be sent out when there are missed premiums. This is similar to notices that utility companies, mortgage lenders, etc., have to send before they cut off services or move to foreclose on a house.
So, it’s important for beneficiaries to confirm that notices were sent out according to state / federal laws and the terms of the policy. For example, the coverage lapse notices may have been sent to a wrong address, or the insured may have become disabled. Some policies will waive premiums in the event of a permanent disability, but the company may not have been notified of the disability by the policy holder. Or, they were informed, but they act in bad faith by insisting that they were never told about the disability.
Our life insurance claim denial attorneys can help you with these and other situations where you have been turned down for payment without legal justification.
Complications Involving Life Insurance from an Employer
Many people sign up for policies that are offered through their employer, and as we mentioned before, claiming these benefits may involve additional complications. A lot of claim denials for these policies have to do with the worker’s status, such as:
- The insured was not a full time employee
- The worker was on sick leave at the time of death
- The employee did not work for the company long enough.
- There were administrative errors in porting the policy to a new employer’s group plan.
- The full premium amount was not deducted by the employer.
While these are not invalid reasons, you should never assume that a claim denial cannot be disputed. With some of these issues, the employer or the insurance company is at least partially responsible for the problems with the policy, and that can work in your favor if you are trying to claim payments from a life insurance policy provided by an employer.
Contact a California Life Insurance Denial Attorney
If you were wrongfully denied benefits from a life insurance policy, the lawyers of Normandie are here for you with decades of experience in bad faith insurance tactics. We are more than ready to fight for your interests and bring you every penny you deserve from a life insurance claim in the state of California.
Our law firm has a Zero Fee Guarantee policy, where clients pay $0 upfront. Instead of charging you out of pocket, we agree to receive a portion of your settlement at the end of your case. In other words, we make absolutely nothing if we don’t win your lawsuit.
The process begins with a free case evaluation, which you can schedule by contacting our law firm.
