Life insurance companies frequently deny claims by relying on technical arguments such as alleged misrepresentation, policy lapse, or broadly worded exclusions. Many of these denials do not hold up under legal scrutiny. Our firm recently recovered $165,200 for a beneficiary after Security Mutual Life Insurance Company wrongfully denied a valid life insurance claim. This outcome reinforces an important reality for beneficiaries: a denial letter is often just the beginning, not the end.
How the Security Mutual Denial Was Overturned
In this case, Security Mutual denied the claim by asserting that the policyholder failed to disclose a pre existing medical condition on the application. Critically, the insured’s death had no connection to that condition. Despite this, the insurer argued that the omission constituted material misrepresentation and attempted to void the policy entirely.
Our attorneys conducted a detailed review of the application, medical records, underwriting guidelines, and internal insurer documentation. The evidence showed that the insured answered the application questions truthfully and reasonably, based on their knowledge at the time. We also demonstrated that even if the condition had been disclosed, it would not have affected the insurer’s decision to issue the policy or the premium charged.
After presenting a comprehensive legal brief outlining breach of contract principles and exposure to bad faith liability, the insurer reversed its position. Security Mutual paid the full $165,200 death benefit to the beneficiary.
Why Life Insurance Claims Are Commonly Denied
Many beneficiaries are shocked when a life insurance claim is denied. Insurers often rely on a small group of recurring arguments, even when those arguments are weak or overstated.
Alleged Misrepresentation on the Application
Misrepresentation is one of the most frequently cited reasons for claim denial. After a policyholder dies, insurers often perform a retroactive investigation of the application, comparing it against years of medical records. Any inconsistency, no matter how minor, may be labeled as material.
Legally, this approach is flawed in many cases. Not every omission or inaccuracy is material. Insurers must typically show that the information would have changed their underwriting decision. Courts also recognize that applicants answer questions based on their understanding at the time, not with the benefit of hindsight. When the alleged misrepresentation has no causal connection to the death, denials are especially vulnerable to challenge.
Policy Lapse and Missed Premium Allegations
Another common denial tactic involves claims that the policy lapsed due to nonpayment. While policies do require timely premium payments, lapse based denials are often defective. Automatic payment failures, mailing errors, incorrect addresses, and the insurer’s failure to send required lapse notices can all invalidate a lapse defense.
We frequently find that insurers did not comply with statutory notice requirements or internal procedures before terminating coverage. When those failures exist, the policy may still be enforceable, even if a payment was missed.
Overbroad or Vague Exclusions
Insurers also rely on exclusions related to suicide, criminal activity, intoxication, or hazardous activities. Many of these exclusions are poorly defined. When policy language is vague or ambiguous, courts generally interpret it in favor of the beneficiary.
In practice, insurers often stretch exclusions far beyond their intended scope. Activities described as dangerous are not always defined. Allegations of illegality may be speculative or unsupported. These denials can often be defeated by closely analyzing the policy language and the actual facts of the death.
Delay Tactics and Suspicion Based Denials
When a death is under investigation or involves unusual circumstances, insurers may delay payment for months. They may cite ongoing reviews, request repeated documentation, or suggest fraud without evidence. While insurers are entitled to reasonable investigation, they are not permitted to delay indefinitely or deny claims based on suspicion alone.
Excessive delay can itself constitute bad faith. Our firm regularly forces insurers to justify their actions by demanding internal claim notes, investigation timelines, and compliance with state insurance regulations.
Why Legal Representation Makes a Difference
Life insurance companies are sophisticated entities with experienced claims departments and legal counsel. Beneficiaries who attempt to challenge denials on their own are often at a disadvantage. Our firm levels that playing field by identifying legal weaknesses in the insurer’s position and applying pressure where it matters.
We focus on:
• Reviewing policy language for ambiguity or improper exclusions
• Examining underwriting files for evidence of immateriality
• Investigating lapse procedures and statutory notice compliance
• Identifying bad faith conduct and leverage points for resolution
Our experience includes successful recoveries against many national and regional insurers in cases involving misrepresentation, lapse, exclusion disputes, and delayed claims.
A Denial Is Not a Final Answer
The Security Mutual recovery is a reminder that denied life insurance claims are frequently reversible. Insurers often deny first and justify later, assuming beneficiaries will not push back. With proper legal review, many of these denials collapse quickly.
If your life insurance claim has been denied, delayed, or reduced, prompt legal action is critical. Our firm handles denied life insurance claims nationwide and works on a contingency basis. There is no fee unless benefits are recovered. A denial letter does not define your rights. The policy and the law do.