Losing a loved one is already an emotionally overwhelming experience, and when a life insurance claim is denied, it can add to the burden. Many people depend on life insurance payouts to cover funeral costs, living expenses, and other financial obligations, especially if the deceased was the primary breadwinner in the household. However, life insurance claims can be unfairly delayed or denied, which can leave beneficiaries struggling to get the support they need.
If you’ve recently faced a life insurance claim denial, it’s important to understand your options and take the right steps to protect your family’s financial future. Here are some crucial dos and don’ts to help you navigate the process:
Do: Find Out the Specific Reason for Denial
The first step after receiving a claim denial is to find out exactly why your claim was denied. The denial letter should provide a clear explanation of the reason for the rejection. If it doesn’t, you have the legal right to request the reason in writing from the insurance company.
Understanding the reason for denial is vital because it will guide your next steps and help you determine if the insurer has made an error or is attempting to unfairly reject your claim.
Don’t: Hesitate to Appeal the Decision
If you believe the denial is unjust or based on incorrect information, you should appeal the decision. An appeal is a formal process in which you challenge the insurance company’s denial, requesting that they reconsider their decision.
Appeals are typically filed in writing, and each insurer has its own specific appeal process. It's important to act quickly, as there may be strict time limits for filing an appeal. If you don’t file in time, you might lose your chance to contest the denial.
Do: Consult with a Life Insurance Attorney
Navigating the life insurance claims process can be complex, especially if your claim is denied. Attempting to handle an appeal on your own can significantly reduce your chances of success, particularly if you're unfamiliar with the nuances of insurance law.
An experienced life insurance attorney can guide you through the entire appeals process. A qualified attorney can:
Answer all of your questions
Gather and organize all necessary paperwork
File a comprehensive legal brief (often 100-200 pages) to support your claim
Handle any interpleader cases, which occur when there’s a dispute over the beneficiary designation
Given the complexity of life insurance laws and the high stakes, consulting with a lawyer who specializes in these types of cases can increase your chances of a favorable outcome.
Don’t: Mistake a Delay for an Outright Denial
It’s important to differentiate between a denial and a delay in your life insurance claim. A delayed claim doesn't necessarily mean it will be denied; it simply means the insurer needs more time to process the claim. Delays are common, especially during the contestability period, which typically lasts for the first two years after the policy is issued.
While delays can be frustrating, they often have a better chance of being resolved favorably, especially if you act quickly. Retaining a life insurance attorney during a delay can help expedite the process and ensure that the insurance company complies with its obligations.
Do: Review Your Policy Documents Carefully
Before appealing a claim denial or dealing with a delay, ensure you have the most up-to-date copies of your life insurance policy documents. Having these documents at hand can save your attorney time and allow them to review the policy terms and exclusions more efficiently.
It’s also essential to check that your policy details, such as beneficiary designations, are correct. Any discrepancies or omissions could be grounds for a claim denial or dispute.
Recent Life Insurance Claims Paid After Denial or Dispute
Here are a few examples of life insurance claims that were initially denied but later paid following legal intervention:
Unum: Accidental death claim denied, $532,000
Transamerica: Suicide claim denied, $301,850
Stonebridge Life: Beneficiary dispute with spouse, $210,000
Reliance Standard Life: Autoerotic asphyxiation denial, $315,000
Primerica Life: Accidental death and dismemberment (AD&D) claim denied, $178,000
MetLife: Autoerotic asphyxiation denial, $205,000
Liberty Mutual Life: AD&D claim denied, $330,000
Colonial Life: Beneficiary dispute with ex-spouse, $450,000
AIG Life: Prescription drug claim denial, $100,000
Sun National Life: Alcohol exclusion claim denial, $219,000
These cases demonstrate the importance of appealing denied claims and consulting an experienced life insurance attorney. Many beneficiaries can recover their rightful benefits with the proper legal representation.
Conclusion
Dealing with a life insurance claim denial or delay can be a daunting experience, but it doesn’t have to be. By understanding your rights and responsibilities, staying informed about the appeals process, and working with a skilled life insurance attorney, you can significantly improve your chances of securing the death benefits you and your family are entitled to.
If you've had your life insurance claim denied or delayed, don’t wait. Contact an attorney with extensive experience in life insurance claims to ensure that your case is handled properly and efficiently.