Originally Posted On: https://www.lassenlaw.com/why-would-a-life-insurance-claim-be-denied
Life insurance is the lifeline millions of Americans leave their loved ones in a time of crisis when they are grappling with so many things at once. From dealing with the death of a loved one to trying to figure out how to live their day to day lives such as paying for the mortgage, food, funeral expenses, medical expenses and other crucial costs that so many do not want to worry about. For thousands, this crucial safety net is what keeps them from worrying about their lives and instead allows them to grieve in a manner that is authentic to them.
However, not all life insurance works out the way the insured person intends it to when it comes time for the insured loved one’s to collect on the policy. Sometimes, there are moments when a family or other policy beneficiaries who rightly believe that they are entitled to the proceeds from the policy which was promised to them must deal with a denial of a life insurance claim. There are a multitude of reasons for a life insurance claim denial that can impact the eligibility of all primary and contingent beneficiaries in a negative way. This can potentially impact the financial future of every person who was relying on the life insurance policy payout. Below, we’ll elaborate on what life insurance is, what a beneficiary is, and what some of the reasons are that a claim could be denied.What is a life insurance policy?
A life insurance policy is a policy granted by a life insurance company to the person who seeks life insurance based on a certification of health and a payment of premiums in accordance with the terms of the life insurance policy. The natural conclusion of the life insurance policy, as long as premiums are paid on time, is that once the insured passes away, there will be a payout to the beneficiaries designated by the insured within a reasonable timeframe. However, when there is a denial of a life insurance claim, this payout never happens which can leave beneficiaries frustrated and scared for their financial future.What is a life insurance policy beneficiary?
A life insurance policy beneficiary is a person who is designated to benefit from the life insurance policy. Namely, it is the person who will receive all or some of the payout from the policy once the insured person passes away. There is no rule that the beneficiary must be a living person as sometimes organizations like universities, charities, or others are named beneficiaries on a life insurance policy in furtherance of a goal of the insured. The insured can designate any person or organization as a beneficiary that they wish although some states may have laws directing that life insurance proceeds go to a spouse if the insured was married and acquired the life insurance policy during the marriage. For some insureds, it makes sense to designate multiple beneficiaries in order to spread the wealth among a spouse, various children, and other family members or friends who may be deserving of the financial lift. An insured can also designate multiple organizational beneficiaries for a life insurance policy if their loved ones are taken care of through other means. For example, may decide that their children are all financially independent and leave it to the Red Cross, their university, and a community food bank.
Additionally, an insured can designate one or multiple primary beneficiaries and contingent beneficiaries. In life insurance, a primary beneficiary is the person who will receive the money or their portion of the money if they meet the requirements of the policy and wish to claim it and a contingent beneficiary is the person who will take the place of the primary beneficiary should they not wish to accept the money or should they be ineligible to do so. For any of these beneficiaries, a denial of a life insurance claim could prove to be disastrous financially and leave them on a rocky road.What are some possible reasons for denial of a life insurance policy claim?
Life insurance policies notoriously have exclusions that while not always iron clad, these exclusions often lead to a denial of a life insurance policy claim. They can be difficult to overcome without the help of an experienced lawyer. One of the widely known exclusions to a life insurance policy is the suicide exception which allows the company to deny a life insurance claim died due to the fact they inflicted harm on themselves intentionally that was likely to lead to death. However, this is not the only reason a life insurance company would deny a life insurance policy claim. Some life insurance policy claim denials may emanate from the fact that the death, while natural, occurred outside the policy term making the coverage inoperative at the time of death. A life insurance policy claim may also be denied if it is discovered there was fraud, misrepresentation, or a material omission in the application itself. Any of these three allegations can materially impact whether or not the company would have provided coverage in the first place and thus totally void the policy if any one of those three are proven. When it comes to a possible reason for denial of life insurance policy claims, insurance companies have a bevy of reasons to rely on when not paying out money that beneficiaries deserve.What do I do if I have questions about a denial of a life insurance policy claim?
Thousands of Americans have been in a place where they don’t know what to do after a life insurance policy claim they were relying on has been denied. Contact our office to speak to one of our experienced lawyers about why a life insurance policy claim was denied and how we can help you get the money you deserve. Call us today for a free consultation today to get your life insurance policy claim back on track.
Article written by:
The Lassen Law Firm
1515 Market St #1510
Philadelphia, PA 19102