Life insurance is designed to provide financial security for beneficiaries after the insured’s death, protecting you from the financial hardships of losing a loved one. But what happens when your life insurance claim is wrongfully denied, even though you are clearly entitled to the benefits? Many beneficiaries face this frustrating situation and wonder how to move forward. The answer lies in taking action to assert your legal rights—and a skilled life insurance attorney can help you navigate this challenging process.
Understanding Breach of Contract and Bad Faith in Life Insurance
When an insurance company wrongfully denies a legitimate claim, it often constitutes a breach of contract. This denial can also be classified as bad faith—an unethical practice that is illegal under the law. After the insured’s death, you are expected to file a claim promptly, and the insurance company is legally obligated to process and pay out the benefits within a reasonable time frame.
According to the law, after you notify the insurance company of the insured's passing, they have a duty to investigate the claim and settle it within 30 days. If they do not, they may be engaging in bad faith practices. Some insurers may try to delay the process by offering only a partial payment or presenting questionable reasons for denying your claim. These tactics are often designed to discourage you from pursuing the full benefit you deserve.
Common Delay Tactics Used by Insurance Companies
Insurance companies may use various excuses to delay or reduce the payout of a legitimate claim. Some of the most common reasons they might give include:
Pre-existing Health Conditions: They may claim the insured failed to disclose a pre-existing medical condition, even when the disclosure wasn’t required or relevant.
Private Medical Examiner Disputes: Insurance companies may challenge the results of medical exams or claim there was a dispute over medical records.
Age or Employment Misrepresentation: Claims related to the insured’s age or employment history may be used to reduce or deny the payout, despite being irrelevant to the claim.
Contestability Period Issues: If the insured passed away during the contestability period (usually within the first two years), insurers may argue they are not liable for the full benefits.
Disputes Over Cause of Death: Ambiguities regarding the cause of death can lead to unnecessary delays or partial settlements.
Failure to Provide Income Tax Returns or Other Documentation: Insurers may request additional documents, such as income tax returns or medical reports, to unnecessarily delay the process.
Changes in Address or Location: If the insured’s address changed or they died in a different state, insurers may use this as an excuse to delay payment.
These tactics are meant to wear you down and discourage you from pursuing your claim. They are baseless excuses that insurance companies use to avoid paying out claims in full.
Why You Need a Life Insurance Attorney
Dealing with an insurance company on your own can be overwhelming. Insurers have vast resources and teams of legal professionals to protect their interests, which often puts the individual beneficiary at a disadvantage. Many people mistakenly try to handle the situation themselves, leading to unfair settlements and even complete denials of their rightful claims.
With a life insurance attorney by your side, you gain an advocate who understands the complexities of the insurance industry. A lawyer can identify when the insurer is using bad faith tactics, apply legal pressure to expedite the process, and, if necessary, take the matter to court. You do not have to navigate this battle alone.
A skilled attorney will also help protect you from invalid claims made by the insurance company, such as alleged misrepresentations or the failure to disclose medical conditions. By handling the case on your behalf, your attorney can significantly increase your chances of getting the full benefits you're entitled to.
Don’t Settle for Less—Fight for Your Rights
If you’ve been wrongfully denied life insurance benefits, don’t give up. You are entitled to the compensation outlined in the insurance policy. By working with a qualified life insurance lawyer, you can assert your legal rights and demand the benefits you deserve. Your attorney will ensure the insurer honors its obligations and, if necessary, will fight for a favorable outcome in court.
You don’t have to accept partial payments or unjustified denials. Contact us today to schedule a consultation with one of our experienced life insurance attorneys.