There can be plenty of different situations that can come back to haunt Life Insurance holders. Unfortunate stipulation changes, slightly overdue payments, faulty paperwork processing, all of these can be a cause for a denial or a delay when claim time rolls around. Whether it be an individual policy, or a group policy, it can be overwhelming if it isn’t taken care of quickly. Read about ERISA law.
This is especially true when talking about group life insurance policies held under a corporate banner. Because the insurance policy is not just between the insurance company and the individual, the resulting issues and problems, as well as the liabilities, can come across much harder.
To begin with, there are a few things that must be taken into account. The insurance policy travels between three different parties: The insurance company, the employer/business, and the employee. Each one holds different risks and liabilities, which can default onto them if not taken care of properly.
For Insurance Companies, the risks taken are not as great as they may let on. The primary problems that might arise are paperwork mismanagement, where the company may misplace or mess up the turned in paperwork, resulting in a draft of the documentation that is in the wrong. If proven to be wrong, it would be a much larger payout for the insured members. It can also come to light that the insurance companies may lose in some battles over denials, and if so, will have to pay out a hefty sum.
For the one insured, there are plenty of liabilities. For instance, lying on paperwork, being unemployed, possible past histories. These can all be valid reasons as to what can come back and hurt the employee in the long run of the insurance game.
The largest liability, though, falls onto the employer. There are a few simple reasons for this: one, the insurance company will generally go directly through the company when attempting to deal with any information in regards to a claim. As such, information must be accurate. If not, the insurance company may attempt to claim that the business or company was at fault, and not them.
On the flip side, the employee can claim quite a few different things as well. If the employer does allow the employee to get a policy under the group insurance policy, many steps must be followed, or else the employee can claim negligence on the employer’s part. These can include, but are not limited to:
- Failing to provide employees with a copy of the policy
- Withdrawing the premiums without the coverage
- Misrepresentation in the benefits and eligibility of the coverage status
- Misrepresentation of the existence of coverage when the employee is either on long-term leave, or for another member of the employee’s family
These are just a few ways that liability falls onto the heads of the employer. Be sure to always have all of your documentation, as any of these can occur, leaving you, the insured, as a possible problem for the employer. Make sure you are always covered.
If you have a denied life insurance claim, our life insurance lawyers will get you the full policy amount.