New Policy Denial of Life Insurance Claim
One of the lesser-known reasons for denied life insurance claims is when the policyholder passes away soon after the policy is approved. While it may seem unfair, insurance companies have legitimate reasons for scrutinizing such cases, and understanding the factors involved can help beneficiaries navigate the claims process effectively. Whether new or old, our top life insurance lawyers fight all denied claims. We have recently handled claims against: Banner Life; Fidelity Life; Protective Life; AAA Life; USAA Life; Gerber Life; and more. Most life insurance policies come with a contestability period, typically lasting one to two years from the policy's start date. During this time, if the policyholder dies, the insurance company has the right to thoroughly investigate the claim to determine if there was any misrepresentation or fraud in the application process. The idea behind this clause is to prevent individuals from securing a large payout through dishonest means, such as hiding serious medical conditions or engaging in risky behaviors while claiming to live a low-risk lifestyle. For example, if a person applies for life insurance and claims to be in excellent health but actually has a terminal illness that they fail to disclose, the insurance company has grounds to deny the claim if the policyholder dies soon after approval. Even if the cause of death is unrelated to the undisclosed condition, insurers may still deny the claim on the basis of material misrepresentation—meaning the policy was issued under false pretenses.
Jorgen, a 58-year-old man, applied for a $500,000 life insurance policy and was approved. During the application process, he failed to mention that he had been experiencing chest pains and had previously undergone testing for heart disease. A month after his policy became active, he suffered a fatal heart attack. His family filed a claim, but the insurance company initiated an investigation. After obtaining his medical records, they discovered that he had visited a cardiologist weeks before applying for coverage. Because Jorgen didn’t disclose this information, the insurer denied the claim, citing material misrepresentation. Josephine, a 42-year-old woman, applied for a life insurance policy and was approved within two weeks. Unfortunately, just two months later, she was killed in a car accident. Her husband assumed the claim would be straightforward since it was an accidental death, but the insurance company delayed the payout due to the contestability period. Upon investigation, they found that Josephine had a history of DUI charges that she did not disclose on her application. Even though her accident wasn’t alcohol-related, the insurance company denied the claim because her failure to disclose her driving record was considered a material misrepresentation of risk. Kai, a 65-year-old retiree, purchased a life insurance policy and was approved in record time. Just three weeks later, he was diagnosed with terminal cancer and passed away within a few months. His wife, Constance, filed a claim, but the insurance company flagged the case for investigation. After reviewing his medical history, they found that Kai had seen a doctor for unexplained weight loss and fatigue before applying for the policy. Since he didn’t disclose these symptoms, the insurer claimed that he likely knew something was wrong but applied for coverage anyway, leading to a claim denial.
Our life insurance lawyers will help you get the money to which you are entitled.