Life Insurance Claim Denied Due to Mental Illness
Life insurance is meant to offer peace of mind and financial security for families when they lose a family member. But for those with a history of mental illness, life insurance can have many challenges.
Sarah’s Story: A Denied Prudential Life Insurance Claim
Sarah’s father, Robert, had always been a pillar of strength for his family. Due to battling depression for years, Robert took out a life insurance policy to provide for his family in case the unthinkable happened. When Robert passed away unexpectedly, Sarah and her siblings assumed that his life insurance would pay out, but the insurance company denied the claim. The reason was that Robert had not disclosed his history of depression when he applied for the policy.
Failing to disclose mental health on life insurance application
Like many others, Robert didn’t fully understand how mental health conditions could affect his life insurance. During the application process, he chose not to disclose his depression as so many people suffer from this, worried it might lead to higher premiums or rejection. Unfortunately, this omission became the basis for the insurer’s denial, as non-disclosure or misrepresentation of medical history is one of the most common reasons claims are rejected.
How Mental Illness Affects Life Insurance
Life insurance policies are contracts that require applicants to disclose their medical history, lifestyle, and other personal details. Insurers use this information to evaluate the risk of insuring someone. Mental health conditions—such as depression, anxiety, bipolar disorder, or schizophrenia—often come under scrutiny because they may be associated with increased health risks, including self-harm.
Life insurance claims can be denied for reasons like:
- Non-Disclosure: As in Robert’s case, failing to disclose mental health history can lead to claim denials.
- Contestability Period: During the first two years of a policy, insurers can investigate claims more thoroughly. Any undisclosed information discovered during this period may result in a denial.
- Suicide Exclusion Clauses: Many policies exclude coverage for suicide within the first two years. Even if mental illness contributes to the death, this clause may be invoked.
- Pre-Existing Conditions: Policies often exclude deaths resulting from pre-existing conditions, including mental health disorders, if explicitly stated in the terms.
The Emotional and Financial Toll
Sarah’s experience highlights the emotional and financial toll such denials can take and highlights the need for greater awareness around mental health and life insurance policies.
What can I do to after a denied life insurance claim due to mental illness?
If your life insurance claim has been denied, LifeInsuranceAttorney.com can help.