Life insurance is meant to provide financial support to your family after you pass away. Unfortunately, life insurance companies, including notable providers like Unum, AIG, and Gerber Life, often deny or delay claims for various reasons, from non-payment of premiums to mistakes on applications or disputes over the manner of death. Understanding the most common reasons for claim denial can help you take the necessary steps to protect your family's financial future and determine how to respond if your claim is denied.
1. Non-Payment of Premiums
One of the most common reasons for life insurance claim denial is non-payment of premiums. If the policy has lapsed due to missed payments and the grace period has expired, the insurer may deny the claim. This is particularly common among elderly policyholders who may forget to pay their premiums.
To avoid this, setting up automatic premium payments or direct debit from a checking account can ensure that premiums are consistently paid on time. That said, life insurance companies have a responsibility to notify policyholders if their policies are about to lapse. If a claim is denied due to non-payment, it’s essential to consult an experienced life insurance lawyer to determine if the insurance company followed the proper procedures in notifying the policyholder and maintaining the policy.
2. Misrepresentation or Mistakes by Your Employer
For individuals who have group life insurance through their employer, mistakes made by the employer or the HR department can sometimes result in a claim denial. Simple paperwork errors, such as incorrect beneficiary information or failure to properly enroll the employee in the insurance plan, can create significant problems.
These types of errors often result in delays or denials after the employee’s death, leaving the beneficiaries in a difficult position. Fortunately, there are legal protections for unfairly denied claims. If you find yourself in this situation, an experienced life insurance attorney can help resolve group insurance claim denials and ensure beneficiaries receive the payouts they’re entitled to. Always double-check your insurance documents when signing up for benefits or making any changes to your coverage.
3. Beneficiary Changes and Disputes
Beneficiary changes can lead to disputes, and in some cases, even result in an interpleader—a legal process where the insurance company asks the court to decide who should receive the death benefit. This often occurs after major life events, such as divorce, where the intended beneficiary might no longer be the individual designated in the policy.
It’s critical to regularly review and update your beneficiary information. Many people mistakenly assume that their beneficiary designation automatically changes after a life event, but that’s not always the case. Divorce, for instance, may not automatically revoke the ex-spouse’s status as a beneficiary. If you’re facing a beneficiary dispute, working with a skilled life insurance lawyer with at least 15 years of experience is key to navigating these complex cases.
4. Specific Exclusions in the Policy
Every life insurance policy has specific exclusions—circumstances under which the insurer may deny a claim. Common exclusions include death resulting from high-risk activities like extreme sports, suicide, or death during a criminal act. While these exclusions are typically outlined in the policy, insurers may try to use these clauses as reasons to deny a claim.
If your claim is denied based on one of these exclusions, it’s essential to work with a life insurance lawyer who can assess the circumstances and determine whether the denial is valid. Policies can be complex, and an experienced lawyer can help identify any potential weaknesses in the insurer’s position and fight for your claim.
Get Legal Help for Denied or Delayed Life Insurance Claims
If your life insurance claim has been denied or delayed, it’s important to evaluate the situation carefully. Often, there are ways to challenge these denials, but the process can be complicated and requires expertise. A highly experienced life insurance attorney is essential in ensuring that you pursue every avenue to resolve the issue and secure the benefits you’re entitled to.
At our firm, we specialize in handling delayed and denied life insurance claims. Whether your claim has been denied due to non-payment, paperwork errors, beneficiary disputes, or exclusions, we can help. Contact us today for a free consultation to discuss your situation and learn how we can help you get the compensation you deserve.