60% of U.S. adults have some form of life insurance, and the number of young adults recommending life insurance to others is growing. However, despite the benefits, life insurance claim denials can disrupt the security intended for a deceased person’s family, adding stress during an already difficult time.
The good news is that a denied life insurance claim is not necessarily the end of the road. With the right legal guidance, many claims can be successfully contested and reversed. Let’s explore common reasons for denial and what steps you can take if your claim is denied.
What is the Life Insurance Contestability Period?
The contestability period is a critical timeframe that impacts many denied life insurance claims. This period generally spans the first two years after the policy is issued. During this time, the insurance company has the right to thoroughly review the insured’s application, medical records, and other relevant information. They may deny a claim if they find that the insured made a material misstatement during the application process.
Common reasons for denial during the contestability period include:
Failure to disclose medical conditions
Inaccurate or incomplete information on the application
Omissions or errors made unintentionally by the applicant
While some denials are based on material misstatements, which could rightfully be grounds for denying a claim, many claims are rejected due to simple mistakes or oversights that do not significantly affect the policyholder's eligibility for coverage.
Insurance companies often take advantage of the contestability period to delay payments or find reasons to deny claims, counting on beneficiaries to accept the denial without questioning it. Understanding your rights during the contestability period is vital in protecting the financial security your loved ones are entitled to.
Common Reasons for Life Insurance Claim Denials
Life insurance companies often cite various reasons for claim denials, including:
Missed payments or lapsed policies
Exclusions for specific causes of death, such as suicide or high-risk activities
These denials may seem straightforward, but they are not always final. Insurance companies may make mistakes when determining cause of death, or they may improperly apply policy exclusions. Even when the claim is based on delayed premium payments, you may still have options to contest the decision.
How to Contest a Life Insurance Denial
If your life insurance claim has been denied, there are several avenues you can pursue to contest the denial:
Assert that any misstatement was not material: Even small errors may not be significant enough to impact the validity of the claim.
Dispute the insurance company’s determination of the cause of death, particularly if they have incorrectly attributed it to a cause excluded by the policy.
Prove that a late payment was made within the grace period, ensuring that the policy was still active at the time of death.
Challenge a policy exclusion: In some cases, an insurer may have misinterpreted a clause in the policy, leading to an unjust denial.
When You Need an Experienced Life Insurance Attorney
Life insurance companies often seek to maximize their profits by denying claims or delaying payments. If your claim is delayed or denied, don’t accept the insurance company’s decision without consulting an attorney. An experienced life insurance lawyer can guide you through the complex appeals process and increase your chances of getting the benefits you deserve.
Our life insurance attorneys specialize in contested claims and have a proven track record of helping clients win denied claims. We are well-versed in contestability periods, policy exclusions, and other complex aspects of life insurance law.
Get Help with Denied Life Insurance Claims
If your life insurance claim has been denied, don’t give up. You have legal rights, and with the help of an experienced attorney, you can fight to secure the benefits you are entitled to.
Contact us today for a free consultation to discuss your case and learn how we can help you navigate the process and maximize your chances of success.