We are happy to announce a resolved Cincinnati Life insurance claim denial. Many families face an unexpected roadblock when a life insurance claim is denied. While insurance companies may present their reasons as justified, many denied life insurance claims stem from technicalities, misunderstandings, or disputes over policy terms. Our life insurance lawyers fight denied life insurance claims and win.
Most life insurance policies include a grace period after a missed premium payment, during which the policyholder can still make a payment to keep the policy in force. If the insured dies within this grace period, the claim may still be paid out, but it depends on whether the insurer determines that the policy was still active at the time of death. Some companies may reduce the benefit by the amount of the overdue premium, while others may attempt to deny the claim altogether, arguing that the policy was in default. Beneficiaries facing a denial in such cases should carefully review the policy terms and consider consulting an attorney to contest the insurer’s decision.
A common issue arises when a policyholder fails to update their beneficiary designation after marriage. If the insured had previously named another individual such as a parent or former spouse as the beneficiary and never officially changed it to their wife, the insurer will distribute the payout based on the existing records. Unfortunately, even if the insured intended for their wife to receive the benefits, verbal agreements or wills do not override the named beneficiary on the policy. In cases where the insured failed to update the policy, the wife may need to pursue legal action, but the success of such claims varies based on state laws and policy provisions. Every life insurance policy includes exclusions—specific circumstances under which the insurer will not pay out a claim. Common exclusions include suicide (typically within the first two years of the policy), death caused by participation in high-risk activities (such as skydiving or car racing), and death due to illegal activities or drug overdose. Some policies also contain exclusions for acts of war or aviation accidents unless the insured was a passenger on a commercial flight. Understanding these exclusions is crucial, as they are often cited when denying claims. If a claim is denied based on an exclusion, beneficiaries should request a detailed explanation from the insurer and consider challenging the decision if they believe it is unjustified.
When a life insurance policy names a sole beneficiary, other family members may contest the payout, especially in cases involving second marriages, estranged relationships, or unexpected beneficiary changes. If an insured names a sibling, child, or friend as the sole beneficiary instead of their spouse, the spouse may have limited legal recourse unless state laws grant them rights to the payout. Some states have laws that automatically revoke a former spouse as a beneficiary upon divorce, but these do not apply to other family members. When disputes arise, legal intervention is often necessary to resolve conflicts and ensure the beneficiary’s rights are upheld. A contentious issue in life insurance claims arises when siblings are named as beneficiaries instead of a spouse or children. This can happen due to outdated policies, family disputes, or the insured’s personal preferences. In some cases, surviving spouses or children may attempt to contest the payout, arguing that the insured did not intend for the sibling to receive the benefits. However, unless fraud or undue influence can be proven, insurers will follow the policy’s stated beneficiary designations. Families facing such disputes may need to pursue legal avenues to argue their case, particularly if they believe the designation was made under questionable circumstances.
While many assume that a spouse is automatically entitled to life insurance proceeds, this is not always the case. Life insurance beneficiary rules generally prioritize the named beneficiary over any familial relationship. Some states follow community property laws, which require the spouse’s consent for beneficiary changes, while others allow policyholders complete discretion in naming their beneficiaries. If a spouse is not named as the beneficiary and believes they have a legal claim, they may need to challenge the designation in court. However, the burden of proof is often high, and success is not guaranteed. A life insurance policy typically names a primary beneficiary the individual who will receive the payout first. If the primary beneficiary is deceased or otherwise unable to claim the benefit, the payout then goes to the contingent beneficiary, if one is named. If no living beneficiary exists, the payout may be directed to the insured’s estate, which can result in delays, legal disputes, and potential creditor claims. To avoid complications, policyholders should regularly review and update their beneficiary designations to ensure their benefits are distributed as intended.
Most life insurance policies include an incontestability clause, which limits the insurer’s ability to deny a claim due to misrepresentation after the policy has been in force for two years. This means that if an insured dies after this period, the insurer cannot deny the claim based on errors in the application, unless outright fraud is proven. However, if the insured dies within the first two years, the insurer may scrutinize the policy application for inconsistencies or misstatements. Common reasons for denial under this clause include undisclosed medical conditions, inaccurate income reporting, or failure to mention risky hobbies.