Unlawful insurance company denial of valid life insurance claims

Unlawful insurance company denial of valid life insurance claims

April 8th, 2023 / Sanga Turnbull

Life insurance is supposed to provide peace of mind to policyholders, ensuring that their loved ones are protected in the event of their death.

However, when an insurance company denies a valid life insurance claim, it can be devastating for the beneficiary.

In this article, we will discuss the reasons why insurance companies may deny a valid life insurance claim and what steps can be taken to fight back against an unlawful denial.

Reasons for Unlawful Life Insurance Denials.

Policy Lapse

One common reason for a life insurance claim denial is a lapse in policy coverage. If the policyholder fails to make timely premium payments, the policy may lapse, and the beneficiary may be left without coverage. However, if the policyholder's death occurred during the grace period, which is typically 30 days after a missed payment, the claim should still be valid.
Misrepresentation

Another reason for an unlawful life insurance denial is a misrepresentation by the policyholder on the application. If the insurance company finds that the policyholder made a misrepresentation on the application, such as failing to disclose a pre-existing medical condition, they may deny the claim.
Suicide

Most life insurance policies have a suicide clause that states that if the policyholder commits suicide within a certain time period after the policy is issued, typically two years, the policy will not pay out. However, if the policyholder's death was not the result of suicide, the claim should still be valid.
Contestability Period

Another reason for an unlawful life insurance denial is the contestability period. This is the period of time after the policy is issued, typically two years, during which the insurance company can investigate the policyholder's application and medical history to ensure that there was no fraud or misrepresentation. If the insurance company discovers that the policyholder made a misrepresentation, they may deny the claim.

Steps to Fight Back Against Unlawful Life Insurance Denials

Gather Evidence

The first step in fighting back against an unlawful life insurance denial is to gather evidence. This may include medical records, correspondence with the insurance company, and the policy itself. You should also keep detailed records of any conversations you have with the insurance company, including the date, time, and name of the representative you spoke with.
Contact an Attorney

If you believe that the insurance company has wrongfully denied your claim, you should contact an attorney who specializes in insurance law. An attorney can review the policy and the circumstances surrounding the denial to determine if you have a case. If the attorney believes that you have a strong case, they may be able to help you file a lawsuit against the insurance company.
File a Complaint with the Insurance Company

Before filing a lawsuit, you should file a complaint with the insurance company. This will allow the company to review your claim and provide an explanation for the denial. If you are not satisfied with the response, you can then file a lawsuit.
File a Complaint with State Insurance Regulators

If the insurance company does not respond to your complaint or you are not satisfied with their response, you should file a complaint with your state insurance regulator. The regulator will investigate the complaint and may be able to help you resolve the issue.
Be Prepared to Negotiate

In some cases, it may be possible to negotiate with the insurance company to reach a settlement. This can be a faster and less expensive option than going to court. However, you should be prepared to stand your ground and fight for what you believe is rightfully yours.
Stay Persistent

Finally, it is important to stay persistent in your efforts to fight back against an unlawful life insurance denial. It can be a long and frustrating process, but it is important to keep pushing until you receive the payout that you are entitled to.