Common Reasons for Denied Life Insurance Claims: Real Lawsuits Against New York Life
At our life insurance law firm, we handle claims that have been wrongfully denied by major insurers like New York Life Insurance Company. Many beneficiaries are stunned when their loved one’s policy is not honored—often after years of faithfully paying premiums. Whether the denial is based on alleged misrepresentation, a lapse in coverage, or interpretation of an exclusion clause, beneficiaries have legal options. Below are real case examples showing the most common types of life insurance claim denials and how they were challenged in court.
Alcohol Use and DUI History Alleged—But Contestability Period Had Passed
In June 2015, a man obtained a $250,000 policy from New York Life, naming his wife as the sole beneficiary. He died in a car accident in November 2017. New York Life denied the claim, arguing that he failed to disclose his history of alcohol abuse and DUI convictions. His wife sued for breach of contract and bad faith, maintaining that he had answered truthfully and that the two-year contestability period had expired. This case reflects how insurers may wrongly attempt to rescind policies after the contestability window closes.
Medical History and Smoking Status Challenged—Insurer Accused of Bad Faith
After her father died of a heart attack in February 2016, the plaintiff filed a claim under his $100,000 policy. New York Life denied it, claiming he had failed to disclose his smoking habit and medical history. She sued the insurer, asserting that the denial violated the incontestability clause, which bars such challenges after two years unless fraud can be proven. This case highlights how insurers may improperly rely on application omissions to avoid payment.
Cancer Diagnosis Allegedly Withheld—Claim Mishandled
The plaintiff’s mother purchased a $50,000 policy in July 2013 and died of cancer in August 2015. New York Life denied the claim, arguing that she failed to disclose prior treatment and diagnosis. The beneficiary sued for breach of contract and alleged claim mishandling, stating that her mother had disclosed all relevant health history. This type of denial is common, especially when insurers seek to connect a death to a condition allegedly hidden on the application.
Stroke-Related Death and Blood Pressure Disclosure Dispute
A man was denied the death benefit under a $150,000 policy after his wife died of a stroke in May 2014. New York Life accused her of misrepresenting her blood pressure and cholesterol levels. The plaintiff sued, arguing that the insurer unjustly delayed and denied the claim and that her answers were accurate to her knowledge. Delays in processing and vague medical questions are often central to these types of disputes.
Drug Use and Criminal Record Raised Post-Mortem—Challenged as Bad Faith
After her son died of a drug overdose in 2013, the plaintiff’s claim under his $75,000 policy was denied. New York Life cited misrepresentations about drug use and criminal history. The policy had been in effect for more than two years, yet the insurer attempted to rescind it. The plaintiff argued that her son had disclosed all relevant information and that rescinding the policy post-contestability period constituted bad faith. These cases emphasize the importance of timing and what insurers can legally contest.
Heart Attack and Family History Dispute—Violation of Incontestability Claimed
A woman was denied benefits under a $200,000 policy after her husband died in 2012. New York Life alleged he misrepresented his weight and family medical history. She sued, asserting he had been truthful and that the insurer violated the incontestability clause by challenging the claim beyond the permitted time frame. These disputes often hinge on how subjective the application questions were and how soon after the policy was issued the death occurred.
Smoking History and Lung Cancer—Final Case in Series of Similar Denials
In one of the earliest disputes, a man was denied a $125,000 benefit after his father died of lung cancer in 2011. New York Life claimed the insured failed to disclose his smoking habit. While this case did not proceed to a reported outcome, it illustrates a recurring theme: insurers using health history disputes to avoid payment, particularly for conditions with well-known risk factors like smoking.
What These New York Life Denial Cases Teach Us
Across these real lawsuits, a few patterns stand out:
Misrepresentation is the most common reason for denial, often based on minor or disputed omissions.
Incontestability clauses, which typically prevent policy rescission after two years, are frequently overlooked or misapplied by insurers.
Health conditions, substance use, and criminal records are frequently cited even when not material to the cause of death.
Insurers sometimes attempt to rescind policies years after issuance, despite having accepted premiums the entire time.
Our law firm challenges these practices and fights for full payouts—especially when insurers rely on vague policy language or deny claims without sufficient proof.
FAQ
What is a contestability clause and why is it important?
Most life insurance policies include a two-year contestability clause. After this period, the insurer cannot deny a claim due to application misstatements unless it can prove fraud.
Can a life insurance claim be denied for failing to disclose smoking?
Yes, but only if the omission was intentional and material. If the policy is past the contestability period, the insurer may have no legal basis to deny the claim.
What if my loved one died of something unrelated to a past medical condition?
We can argue that the cause of death is unrelated and that any past condition was not material to the issuance of the policy or the claim.
Do I need a lawyer to fight a life insurance denial?
Absolutely. Insurers have legal teams reviewing every claim. To challenge a denial effectively, you need someone who understands how to leverage contract law, bad faith statutes, and claim procedures.