When faced with a situation where the life insurance claim of a deceased loved one is denied or delayed by their employer-sponsored insurance company, it is crucial to promptly seek legal assistance. Familiarize yourself with the Employee Retirement Income Security Act of 1974 (ERISA), which governs employer-sponsored life insurance policies for non-government employees and imposes strict deadlines for appealing claim denials.
To contest an ERISA life insurance claim that has been denied, you must adhere to a 60-day written appeal requirement. It is essential to approach this appeal process diligently and accurately on the first attempt. Upon receiving a denial letter from the insurance company stating that the claim will not be paid or will be reduced, it is advisable to engage an experienced life insurance attorney without delay.
Under ERISA life insurance plans, the written appeal process must be exhausted before initiating a lawsuit to enforce the insurer's obligation to provide the promised benefits. This highlights the critical importance of involving an attorney early in the process. Failure to meet the 60-day appeal deadline jeopardizes your ability to seek legal recourse. Once the threat of litigation diminishes, the insurance company's motivation to reach a settlement significantly decreases.
To safeguard your rights as a beneficiary of an ERISA group life insurance policy, you possess various protections under the law. Employers and plan sponsors have obligations dictated by ERISA, which holds them to a fiduciary standard of care—a legal benchmark that necessitates acting in utmost good faith.
ERISA claim denials often occur due to mistakes made by employers and plan sponsors, such as misplaced paperwork or failure to remit promised premiums to the insurance company for coverage. Given the stringent care standards imposed on employee benefits sponsors, employers may be held liable for financial consequences resulting from errors or omissions in administering benefits. Employers often carry insurance coverage to mitigate this liability, providing an additional avenue for skilled life insurance attorneys to pursue compensation.
However, ERISA limits your ability to directly file a lawsuit against the insurance company for bad faith or breach of contract. Furthermore, jury trials are not an option, and introducing new evidence against the insurance company beyond what was included in the initial appeal is prohibited. This underscores the importance of involving an experienced attorney from the outset to ensure a comprehensive appeal that avoids any potential mistakes.
As proficient attorneys specializing in life insurance law, we possess the knowledge to request pertinent documents from the insurance company and construct a robust appeal to safeguard your future rights.
Common causes of ERISA claim denials or delays align with issues encountered in individually-owned life insurance contracts. These may include misrepresentation on the application, suicide within the contestability period, exclusion of the cause of death, death resulting from a felony, policy lapsing due to nonpayment of premiums, or the claimant not being listed as a beneficiary.
Additionally, specific issues unique to employer-sponsored life insurance benefits may arise, such as the policy not being in force because the deceased individual was not an employee at the time of death. Other scenarios include insufficient hours worked, being on sick leave or other forms of leave at the time of death, serving in the U.S. Armed Forces during the fatality, death resulting from terrorism or war, failure to convert a company-owned policy, omission of the individual as a covered party, failure to provide required documents to the insurer, premium non-payment, policy cancellation by the employer, or reduction of benefits due to the exclusion of accidental death and dismemberment coverage.
If an employer's error or misconduct contributes to the claim denial, your chances of prevailing increase significantly when you have an experienced life insurance attorney advocating on your behalf.
It is paramount not to attempt to confront these challenges alone. Retaining an attorney experienced in ERISA life insurance litigation is vital because federal ERISA law governs these cases and supersedes conflicting state laws.