In many cases, insurance companies keep their promise and pay the benefits to the named beneficiary after the insured’s loss of life. Very often, however, life insurance claims get refused for a variety of reasons.
Some of the excuses the insurance companies use in denying promises aren’t legitimate but designed to convince a named beneficiary that his claim is denied for a appropriate reason.
Many life insurance claims can get denied due to the following top reasons:
1. Material misrepresentations on the policy
In the event that an covered by insurance dies within the initial two years from the time a life insurance plan became effective, the company has the right to contest the policy. Contestability is checking the departed insured’s history.
When an applicant applies for insurance coverage, he is asked to finish a life insurance software which asks many questions regarding age, weight, income, health, hobbies, criminal historical past, and so forth. If, while contesting the plan, the insurance company discovers information not reflected on the application, it may deny a claim.
Reasons Lifestyle Insurance Companies May use In order to Deny Your State
Simply material misrepresentations (those that affect risk) can cause policy cancellation. Many insurance coverage companies use contestability as a possible possibility to deny a appropriate claim even if a misrepresentation/non-disclosure on the software is not material. Beneficiaries should be aware of the process of contestability and possible outcomes it can bring.
See how a case of contestability check can be resolved here: Successful case of declare delayed due to contestability check
2. An employer’s failure to submit a waiver of premium
Party life insurance coverage is very common.
Whenever employees choose to take part in their employer-provided life insurance programs, they enroll into group life insurance plans. Several of such group strategies provide coverage not only to the employees but also with their qualified household.
The amount of coverage may vary depending on an twelve-monthly salary of the participant, as well as their choice of recommended supplemental coverage. Sometimes, business employers pay premiums for employees; in others, premiums are deducted from employees’ paychecks.
Whatever the scenario is, group coverage is a very popular and affordable way to get life insurance.
The employer’s role is often very important in explaining the benefits to its covered employees.
The human resources section is often in charge of acting as an intermediary between the life insurance company and insured employees and has a duty to provide accurate information regarding benefits.
Unfortunately, often, a company will misrepresent information about life insurance coverage to its employees which can lead to denied benefits after the employee’s death.
Our life insurance attorneys always suggest clients to review team life insurance policies carefully when electing coverage. In addition, whenever there is a change in the party plan, it is a good idea to make a note of that change and review the policy and eligibility requirements periodically.
Unfortunately, in many cases, employees are never provided with a duplicate of their life insurance policy and have only a vague idea about what produces a qualified loss or who will be considered a qualified dependent.
Additionally , many employees do not really know what their eligibility requirements are. A likely outcome of not being aware of what a plan covers is surely an unfortunate situation where a group life insurance claim is refused after the insured’s death.
A really common example of a denied group life insurance claim is a situation where a impaired employee is assured by his employer that this individual does not need to pay premiums on his group policy while on disability and that his life insurance coverage will stay in effect during his disability.
Typically the employer then fails to submit all the essential documents to the insurance company which results in coverage being terminated. The legislation protects beneficiaries from illegally denied claims such situations and benefits can easily still be recovered through the legal process.
A denied party life insurance claim is handled differently from other claims. In many instances, a group life insurance policy claim is manipulated by ERISA, which governs all employee welfare benefit programs. ERISA usually trumps inconsistant state laws and offers many protections for plan participants.
3. Policy lapse/nonpayment of monthly premiums
Usually, a life insurance policy is just active for as long as premiums are paid. When no premium is created when it is credited, a policy may lapse/terminate.
Denied claims due to lapse are extremely common and insurance firms often use nonpayment of premiums as an excuse to deny a claim even if a state should be paid. Because a beneficiary, you have the right to know whether or not the insurance company sent premium-due notices to the correct address and whether the notice plainly warned the insured of the approaching lapse.
4. No beneficiary designation on file
A life insurance claim may be denied if the insured failed to name a beneficiary. Every policy has provisions regarding who should get the profits if there is no designated beneficiary.
Further, the laws of the express where the insured resided may influence the way the benefits are paid. Such state may cause lengthy gaps and denial as insurance policy companies may pay the huge benefits to the wrong person.
5. Post-divorce beneficiary change
Insurance coverage is often mentioned during divorce and child support actions. In many cases a parent is ordered by court to keep up his children as beneficiaries on his life insurance policy.
If the father or mother later violates the the courtroom order and changes beneficiaries, a life insurance state filed by the children may be denied. In case your case involves a court order and a subsequent beneficiary change, you may need to communicate with an legal professional before the claim is registered.
However, these laws have many exclusions. Generally, they apply only to state law claims and should not revoke beneficiaries in cases controlled by federal laws. State examiners working for life insurance companies might not exactly know all the intricacies of such laws and interaction between federal and state statutes.
When you see, there may be many different ways an insurance company can deny your declare. A denied life insurance policy claim does not mean which a beneficiary is out of options.
Every delay or denial should be reviewed by an experienced life insurance coverage attorney and contested, whether it appears that a claim was wrongfully delayed or denied. In case you find yourself in one of the situations described above or you simply need advice, a free consultation to help you examine your circumstance will always be available to you Insurance attorney in Chicago.
When an insurance company is delaying a claim, it must provide the beneficiary with its reason for doing this. If beneficiaries don’t understand the reason for their state delay, they must communicate with a life insurance policy lawyer to understand the issue.
common issues that can lead to delay are nondisclosure of facts at the application stage, beneficiary designation not complete at the applying period, a dispute between a claimant and members of the family, unconfirmed cause of death (e. g., suicide cases where police may take some time to certify the final cause of death) and murder cases, where nominee is suspected to be involved in dying of the insured.