As one of the most important forms of insurance, life insurance is a contract between the policyholder and the insurer. The policyholder agrees to pay premiums in exchange for the insurer’s promise to pay a lump sum of money, known as the death benefit, to the beneficiary upon the policyholder’s death. Unfortunately, not all claims are approved by insurers. When this happens, it’s important to have an experienced attorney on your side to help you file a claim and fight back against a denied claim.
Life insurance is a crucial form of protection that provides financial support to beneficiaries after the death of the policyholder. There are different types of life insurance policies available, but the most common are term life insurance and permanent life insurance.
Term life insurance is a policy that covers the policyholder for a specified period of time, usually between 10 to 30 years. If the policyholder passes away during this time, the death benefit is paid out to the beneficiaries.
Permanent life insurance, on the other hand, covers the policyholder for their entire life, as long as they continue to pay the premiums. Permanent life insurance policies can also build cash value over time, which can be borrowed against or used to pay premiums.
When a loved one passes away, filing a life insurance claim can be an emotional and overwhelming experience. Unfortunately, there are several reasons why an insurance company might deny a claim. Some of the most common reasons for a life insurance claim denial include:
Policy Lapse: If the policyholder stopped paying premiums and the policy lapsed before their death, the insurance company is not obligated to pay out a death benefit.
Misrepresentation: If the policyholder provided false or misleading information on their application, the insurer may deny the claim.
Suicide: Many policies have a suicide exclusion clause that prevents the insurer from paying out a death benefit if the policyholder took their own life within a certain period of time after purchasing the policy.
Contestability Period: Most life insurance policies have a contestability period, typically two years after the policy is issued. During this time, the insurer can investigate and deny a claim if they find evidence of fraud or misrepresentation.
Insurance companies will use various tactics to deny a life insurance claim. They might claim that the policyholder failed to disclose important information, such as a pre-existing medical condition or a history of drug or alcohol abuse. Alternatively, they might argue that the policy lapsed or that the cause of death was not covered by the policy.
It’s important to keep in mind that insurance companies are for-profit entities and will try to pay out as little as possible. They might even attempt to delay the claims process, hoping that the beneficiary will give up or settle for a lower payout.
The length of time it takes to receive a life insurance payment varies depending on the circumstances. If the claim is straightforward and the insurer approves it quickly, the beneficiary could receive the payout within a few weeks. However, if the insurer denies the claim or requires additional documentation, the process can take several months or longer.
Working with an attorney can help speed up the process by ensuring that all necessary documentation is submitted promptly and accurately.
If you’ve had a life insurance claim denied, it’s important to seek legal help from an experienced attorney. At Your Insurance Attorney, we specialize in helping clients file life insurance claims and fight back against denied claims. Contact us today to schedule a consultation and learn more about how we can help you get the payout you deserve.