Life insurance claims are stressful enough under normal circumstances. But when the policy in question is a group life insurance policy—typically provided through an employer—the situation can become significantly more complex. That’s because group life coverage isn’t just a contract between the insured and the insurance company. It also involves a third party: the employer, who holds significant responsibility in managing and administering the policy.
Whether you’re a policyholder or a beneficiary, understanding the roles, risks, and liabilities of each party is essential—especially if a claim has been denied or delayed.
Three Parties, One Policy—Multiple Opportunities for Mistakes
In a group life insurance arrangement, the policy functions through a relationship between:
The insurance company
The employer or plan administrator
The insured employee (and ultimately, their beneficiaries)
Each party carries obligations—and each can be responsible when things go wrong. Unfortunately, when a claim is denied, it’s often the beneficiary who pays the price for someone else’s mistake.
Where Insurers Go Wrong
Insurance companies are known for being hyper-technical. Common issues that can lead to a denial include:
Mishandling enrollment paperwork
Failing to properly apply premium payments
Claiming a lapse in coverage due to alleged ineligibility
Misclassifying an employee’s eligibility based on job status or leave
Even when the insured made every effort to stay compliant, insurers may try to dodge payouts by exploiting gray areas in the policy. And if the policy language is vague or contradictory, they’ll often interpret it in their own favor unless challenged.
What About the Employee’s Responsibility?
Employees do have responsibilities as well. If they misrepresent their medical history during the enrollment process (especially for supplemental group life insurance), or if they were not actually employed at the time of death, insurers may cite those as valid reasons to deny the claim.
But in many cases, the employee did nothing wrong—and the denial is the result of employer error.
When the Employer Is at Fault
The largest liability in group life policies often falls on the employer, who acts as the intermediary between the insurer and the insured. Employers are legally obligated to administer group insurance policies responsibly. Failure to do so may expose them to liability under ERISA or state-level employment law.
Here are some common employer mistakes that can result in denied claims:
Failure to provide a copy of the life insurance policy or summary plan description to the employee
Withholding premium payments from paychecks without actually submitting them to the insurer
Misrepresenting benefit eligibility during hiring, onboarding, or enrollment periods
Failing to notify the employee that coverage has lapsed or was never activated
Telling an employee they are still covered while on long-term leave or during FMLA, when the policy has actually been terminated
If any of the above has occurred, the beneficiary may have a valid legal claim against both the insurer and the employer.
Document Everything—And Don’t Settle for a Denial
One of the most important things you can do as a beneficiary is to keep all documentation related to the policy. This includes:
Pay stubs showing life insurance premium deductions
Copies of enrollment forms
Any communications from HR regarding benefits
The official denial letter
A copy of the policy and any amendments or riders
When you have records showing that premiums were paid, and that the insured believed they were covered, you may have legal grounds to challenge the denial—even if the insurer claims the policy was inactive.
How We Help Clients with Denied Group Life Claims
Our law firm specializes in life insurance claim denials, particularly those involving group life coverage through employers. These cases often require a deep understanding of not just insurance law, but also ERISA (which governs most employer-sponsored benefits), as well as contract law and employee rights.
We investigate:
Whether the employer or HR department misrepresented coverage
Whether premiums were properly submitted and applied
Whether the insurer wrongly classified the insured’s employment status
Whether the policy language supports a legitimate denial or is being manipulated
We’ve helped clients recover full benefits even when the insurer initially refused payment—sometimes securing compensation from the employer for negligent administration of the plan.
Don’t Let a Denial Define the Outcome
Just because a life insurance claim was denied does not mean it was denied lawfully. Group life insurance denials often arise from behind-the-scenes mistakes—mistakes that only come to light once a lawyer steps in and demands accountability.
If your claim has been denied, or if you're worried about how your coverage is being handled, contact our office today. We offer free consultations and do not charge any legal fees unless we win your case.