Life Insurance Claim Denial Law Firm
Many of us pay monthly life insurance premiums with the expectation that our families will receive financial assistance if the unthinkable happens. Unfortunately, life insurance companies deny many legitimate claims. And too often, grieving families must hire a life insurance attorney in order to get the benefits they deserve when a loved one passes away. It’s important to understand your rights before you file an appeal.
Understanding Your Life Insurance Policy
Most families believe a life insurance policy will provide vital financial assistance if a breadwinner dies unexpectedly. However, life insurance companies are for-profit businesses. Their goal is to minimize their financial obligations, which often results in unfairly denied claims. Insurance companies often deny valid life insurance claims. When benefits are denied to a beneficiary of a life insurance policy, it is important that they understand the terms and conditions of the life insurance policy before they file a claim or appeal. Avoid common mistakes when filing a life insurance claim to protect your rights and improve your chances of success.
The first step in understanding your life insurance claim is to review its written terms and conditions. While your official life insurance plan document may be too dense and technical to understand, the insurance company must also publish a Summary Plan Description (SPD) which provides an overview of your benefits, the claim and appeal processes, and other procedural rules. If requested, the insurance company must give you a copy of the SPD and your plan document.
Once you have a copy of the plan document and SPD, you should review the facts of your life insurance claim. To do this, you should request copies of your loved one’s medical records, death certificate, autopsy reports, and other information. This evidence can support your claim for benefits and clarify any confusion about your eligibility under the plan. An experienced life insurance attorney can assist you with this process.
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Life Insurance Claim Denials
Why Would a Life Insurance Claim Be Denied?
If your claim is denied, you can file an appeal. However, you should consider hiring a life insurance attorney to assist with the appeal process, which typically involves a detailed legal and medical analysis.
Depending on your life insurance policy, you may also have an accidental death and dismemberment (AD&D) claim. Some life insurance plans include a death benefit rider that pays double if you are killed in an accident (as opposed to illness or old age). However, accidental death policies and riders typically include numerous exclusions and loopholes and are frequently disputed. For more information on how these differ from traditional coverage, see The Difference Between Accidental Death and Dismemberment Insurance and Life Insurance. If your policy includes an AD&D or “double indemnity” rider, you should contact a life insurance lawyer for further assistance.
What Happens If a Life Insurance Claim Is Denied?
When a life insurance claim is denied, the insurance company typically provides a written explanation outlining the reasons for denial. You have the right to appeal the decision, which involves submitting additional evidence or documentation to support your claim. If the appeal is unsuccessful, you may consider seeking legal advice to challenge the denial through further negotiation or litigation.
What Percentage of Life Insurance Claims Get Denied?
While most life insurance claims are paid, studies show that approximately 10% to 20% of claims get denied. This denial rate can vary significantly depending on the specific insurance company and the circumstances of the claim. Denials often occur due to incomplete paperwork, misrepresentation, policy exclusions, or disputes over the cause of death. Understanding why claims are denied can help you avoid common pitfalls and improve your chances of approval.
What Will Disqualify Me From Life Insurance?
Several factors can disqualify an individual from obtaining life insurance or cause claims to be denied, including:
- Providing false or incomplete information on the application
- Death occurring during the policy’s contestability period (usually the first two years)
- Death caused by suicide within the contestability period
- Death due to illegal activities or substance abuse
- Pre-existing medical conditions can impact life insurance coverage if undisclosed or misrepresented
Filing a Life Insurance Claim Appeal
Life insurance appeal procedures vary, depending on who paid the policy’s premiums. If the life insurance is employer-funded, the federal Employee Retirement Insurance Security Act (ERISA) applies. If your personal life insurance claim is denied, you may have a claim under state law. Depending on which laws apply, you must follow different appeal procedures.
In an ERISA claim, you cannot file a lawsuit until you complete an administrative appeal process with the insurance company. Strict filing deadlines and evidentiary rules apply to ERISA claims. For example, it is virtually impossible to submit new evidence after the administrative appeal is completed.
In order to avoid costly mistakes, consider speaking with an experienced life insurance lawyer before you appeal a group life insurance denial.
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Incontestability and Life Insurance
Many states, including Florida, Louisiana, and Texas, have incontestability laws which prevent a life insurance company from disputing coverage after a period of time. Even when an incontestability clause is not legally required, you may find one in your policy. Life insurance policies are typically contestable for two years. After this period, the insurance company cannot dispute coverage unless an exception applies (such as non-payment of premiums). The contestability period is two years. If the insurance company has denied a claim on a long-standing policy, contact a life insurance lawyer for assistance.
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Do I Need an Attorney for a Life Insurance Denial Case?
Yes, consulting an attorney after a life insurance claim denial is often a smart decision. While not every denial requires legal help, many situations benefit greatly from having an experienced lawyer on your side. Insurance companies may deny claims over technicalities or attempt to limit payouts, making the process confusing and challenging to navigate alone.
Here are some reasons you might need a lawyer:
- Claim Denial: An attorney can review why your claim was denied, uncover mistakes or misinterpretations, and help you prepare a strong appeal.
- Contested Beneficiaries: If multiple parties claim the benefit, a lawyer can help determine who is entitled to the payout.
- Complex Policies: Some life insurance policies involve complicated legal matters such as trusts or employer-provided plans, requiring specialized expertise.
- Negotiation and Litigation: Lawyers are skilled negotiators who can advocate for you and represent you in court if negotiations fail.
Consider hiring an attorney if:
- The denial reason is unclear or complicated
- The insurance company is uncooperative or delays the process
- You suspect the denial may be in bad faith
- You need guidance on the appeal process
Having legal support can increase your chances of getting the benefits you deserve without added stress.
Speak with a Life Insurance Claims Lawyer Today
If you are facing challenges with a life insurance claim, you don’t have to navigate the process on your own. An experienced life insurance claims lawyer can help protect your rights and work to secure the benefits you deserve. Contact us today to schedule a free consultation and take the first step toward a successful resolution.
Call or text (225) 201-8311 or complete a Free Case Evaluation form