Top 5 Reasons ERISA Life Insurance Claims Are Denied — And How to Fight Back
When you lose a loved one, the last thing you want to deal with is a denied life insurance claim. But for many families relying on ERISA-governed life insurance policies, denials are all too common. These employer-provided policies fall under the federal Employee Retirement Income Security Act (ERISA), which imposes strict guidelines and unique legal limitations on how claims and appeals are handled. Understanding why these claims get denied—and how to fight back effectively—is the first step toward recovering the benefits you’re owed.
What Is an ERISA Life Insurance Policy?
ERISA life insurance plans are typically offered through your employer as part of a group benefits package. While receiving life insurance coverage at work may seem convenient and cost-effective, ERISA policies differ significantly from private life insurance. These policies are regulated by federal law rather than state law, which means your rights as a beneficiary are far more limited. You won’t have access to a jury trial, you may be barred from introducing new evidence if you reach court, and your appeal must be handled through a mandatory administrative process. These factors make ERISA denials especially difficult to overcome without legal guidance.
Why Are ERISA Life Insurance Claims Denied?
Insurers cite a variety of reasons when denying ERISA-governed life insurance claims, many of which are based on strict technicalities, vague contract language, or aggressive interpretations of policy provisions. While each case is unique, here are the top five most common reasons for ERISA life insurance claim denials.
1. Death Occurred During the Contestability Period
Most ERISA life insurance policies include a two-year contestability period that begins when coverage takes effect. If the insured dies during this time, the insurance company has the right to scrutinize the application and investigate for any misstatements or omissions. Even unintentional errors—such as failing to disclose a prescription, a past diagnosis, or a routine doctor visit—can be grounds for denial. Under ERISA, the intent behind the error often doesn’t matter. If the insurer can show that the omission might have influenced the policy’s approval or terms, they may rescind the policy altogether, leaving beneficiaries without coverage.
2. Death Caused by an Excluded Activity or Event
ERISA plans, like individual life insurance policies, contain exclusions that limit when benefits will be paid. These exclusions often include suicide (especially during the first two years), self-inflicted injury, illegal acts, drug or alcohol-related deaths, and hazardous activities like skydiving or racing. In some cases, the exclusion language is hidden deep in the policy or not clearly explained during enrollment. When a claim is denied based on one of these exclusions, beneficiaries may feel blindsided—especially if they were never aware the exclusion existed. Insurers often rely on autopsy reports, police records, or toxicology results to invoke these exclusions, even in cases where the cause of death is disputed.
3. Misrepresentation or Non-Disclosure on the Application
Many people assume that if no medical exam was required, they didn’t have to disclose detailed health information when enrolling in an employer-provided plan. Unfortunately, that’s a common misconception. ERISA life insurance policies often include health questions on the application, even if they seem minimal. Failing to disclose a pre-existing condition, smoking habit, or previous medical treatment—even accidentally—can be classified as a material misrepresentation. Under ERISA’s rules, these misstatements can lead to rescission of the policy and complete denial of benefits, regardless of whether the condition contributed to the death.
4. Allegations of Fraud or Intentional Misconduct
Some denials are based on more serious allegations, such as insurance fraud. If the insurer believes the policyholder lied about their identity, health status, or financial interests in obtaining the policy, they may deny the claim outright. Under ERISA, the burden of proving fraud is lower than in criminal proceedings. The insurer doesn't have to show that the insured acted with malicious intent—only that they submitted information that would have changed the underwriting decision. These denials can be especially difficult to overcome without a detailed legal strategy and thorough analysis of the administrative record.
5. Policy Lapse Due to Missed Premium Payments
One of the most common and frustrating reasons for denial is a lapse in coverage due to missed premium payments. While some employer-provided life insurance plans are paid entirely by the employer, many include supplemental coverage options that require employees to contribute through payroll deductions. If those deductions stop—due to administrative error, unpaid leave, termination, or payroll system changes—the policy may lapse without the employee even realizing it. In such cases, the insurer may argue that coverage was no longer active at the time of death. Reinstating a lapsed policy after the fact is nearly impossible, which is why early legal intervention is critical.
Why Appealing an ERISA Denial Is Different from Other Claims
When an ERISA life insurance claim is denied, the appeals process is governed by strict rules and short deadlines. Before you can file a lawsuit, you must complete a formal administrative appeal with the insurance company, typically within 180 days of the denial. This appeal is your only chance to submit evidence, arguments, and documentation to support your claim. Once the appeal is closed, no additional evidence can be introduced—even if the case goes to federal court.
Because federal judges reviewing ERISA cases rely exclusively on the administrative record, it is absolutely critical to build a complete and compelling appeal from the very beginning. There are no jury trials, no testimony, and almost no opportunity to supplement the case later. That’s why working with a life insurance attorney who understands ERISA is essential. A strong appeal could be your only shot at reversing the denial and recovering the benefits your loved one intended for you.
How a Life Insurance Attorney Can Help Reverse an ERISA Denial
An experienced ERISA life insurance attorney knows how to navigate the complexities of federal benefits law, uncover insurer errors, and prepare a powerful administrative appeal. Attorneys can:
Review the denial letter for legal weaknesses or procedural flaws
Gather and organize supporting documentation, including medical records, employment files, and communications
Draft a persuasive appeal letter that refutes the insurer’s rationale
Identify whether the insurer violated ERISA’s fiduciary duties or claims handling procedures
Represent you in federal court if the appeal is unsuccessful
In many cases, insurers count on beneficiaries not understanding the rules or simply giving up. But with proper legal support, you can challenge the denial and potentially recover the full value of the policy—even after an initial rejection.
You Don’t Have to Accept a Denied ERISA Claim
A denied claim under an ERISA life insurance policy doesn’t have to be the end of the road. Insurance companies often deny valid claims hoping beneficiaries won’t know their rights or how to respond. But with the right legal team, you can push back, uncover the truth, and fight for the benefits that were promised.
Many denials can be overturned, especially when insurers rely on vague exclusions, misinterpret policy terms, or fail to follow ERISA’s own procedural requirements. Whether your claim was denied due to a lapse, alleged misrepresentation, or contested cause of death, your attorney can help you gather the evidence and build the case needed to turn things around.
Contact an ERISA Life Insurance Lawyer Today
If you’ve received a denial letter from a life insurance company under an ERISA plan, time is of the essence. The appeal deadline is short, and missing it could cost you the right to pursue your claim. Contact a qualified ERISA life insurance attorney today to review your case, preserve your rights, and build a strategy for a successful appeal. You don’t have to fight the insurance company alone—get expert legal support and take the next step toward justice and recovery.