When your life insurance claim is denied, it can feel like a major setback. The insurance company will likely send a formal notice explaining why you’re not entitled to benefits. Unfortunately, they probably won’t be responsive if you try to challenge the decision on your own. However, with the assistance of an attorney experienced in life insurance claims denials, you may be able to recover the full benefits owed under the policy.
Common Reasons for Life Insurance Claim Denials
Life insurance claims are denied for various reasons—some legitimate, others in error, and some potentially in bad faith. Below are the most frequent justifications that insurance companies give for denying life insurance claims:
Material Misstatements and the Contestability Period
One of the most common reasons for a life insurance claim denial is the alleged “material misstatement” made on the application. This typically becomes an issue if the insured person dies within two years of obtaining coverage, known as the contestability period. During this period, the insurance company has the right to review the application and other evidence to see if any material misstatements were made.
For example, if the insured failed to disclose a pre-existing medical condition or provided inaccurate information, the insurer may argue that the claim should be denied. However, not every mistake or omission qualifies as a material misstatement from a legal standpoint.
Cause of Death Not Covered by the Policy
Another common reason for a life insurance claim denial involves the cause of death. This issue often arises with Accidental Death and Dismemberment (AD&D) policies, which only pay out under limited circumstances, typically in the event of an accident. However, insurance companies looking to deny benefits may argue that the death was suicide instead of an accident.
While a standard life insurance policy would generally cover suicide after the policy has been active for more than a year, an AD&D policy will not cover suicide. Since suicide is considered intentional, it doesn’t meet the definition of an “accident.”
That said, a determination by the insurance company that the cause of death was suicide does not automatically preclude you from collecting benefits. The insurance company does not have the final say in determining the cause of death—the law does.
Fighting for Your Life Insurance Benefits
Both examples above show how an insurance company may initially deny benefits, but that denial may be challenged legally. If the insurer claims a material misstatement was made, that decision requires further investigation. Even if the insured made a mistake or omitted information, that misstatement may not be material in the eyes of the law.
Similarly, if an insurance company claims suicide as the cause of death, the burden falls on the insurer to prove that the death falls outside the policy's terms. The beneficiary can challenge the insurer’s decision and demand that the claim be re-evaluated.
Get Help from an Experienced Life Insurance Denial Lawyer
Insurance companies count on beneficiaries not contesting a claim denial. They also know that many individuals may not have the legal knowledge or resources to challenge a denied life insurance claim. This is where an experienced attorney with a strong history of handling life insurance denial cases can level the playing field.
If you believe your claim has been wrongfully denied, don’t give up. Schedule a free consultation today with one of our experienced life insurance attorneys to discuss your case and fight for the benefits you deserve.