For many, a life insurance policy provides a crucial safety net, promising to help ease the burden during such a painful time. So, when an insurance company denies a claim, it can feel like the rug has been pulled out from under you.
The shock of a life insurance claim being denied can feel like a second blow, compounding the stress and sorrow of the loss. Instead of a lifeline, the process can turn into a labyrinth of paperwork, technicalities, and legal jargon.
The reasons for claim denials can vary widely, but whatever the reason, each denial carries with it a heavy burden for those left behind. It is a scenario that requires a clear, informed plan of action to effectively address and counter the denial.
At Kantor & Kantor, we have seen firsthand the frustration and helplessness that can ensue when a life insurance claim is denied. Our experienced attorneys understand the intricacies of life insurance policies, and we know how to push back when insurance companies refuse to pay out.
We will walk you through each step of the process, from understanding the reason for the denial to building a strong case for appeal or even taking the matter to court if necessary.
Contact our life insurance lawyers in California at 818-886-2525 for your free consultation.
Why Do Life Insurance Claims Get Denied?
Here are the most common reasons life insurance claims get denied:
1. Misrepresentation or False Information on the Application
One of the most common reasons life insurance claims are denied is misrepresentation on the initial application. When applying for a life insurance policy, the insurer asks detailed questions about medical history, lifestyle habits, and even hobbies.
If any information provided is inaccurate or incomplete—intentionally or unintentionally—the insurer may deny the claim later. For example, the insurer could refuse to pay if the policyholder had a pre-existing medical condition that was not disclosed.
2. Policy Lapses Due to Missed Payments
Life insurance coverage is valid only as long as the premiums are paid. If the policyholder misses payments and the policy lapses, the insurer can deny any claims made after the lapse occurs.
Insurance companies typically give a grace period for missed payments, but if the premiums are not paid within that window, the insurer may deny the claim.
3. Contestability Period
Most life insurance policies include a “contestability period,” which is usually the first two years after the policy is purchased. During this time, the insurer has the right to investigate the claim more thoroughly, including reviewing medical records, even if the death was due to natural causes. If the insurer discovers inconsistencies or omissions during this period, the claim could be denied.
4. Death Due to Excluded Causes
Life insurance policies typically have exclusions—circumstances under which they will not pay out. Common exclusions include suicide, death due to engaging in illegal activities, or death while participating in dangerous hobbies. If the policyholder died in a way that falls under one of these exclusions, the insurer may deny the claim.
5. Disputes Over the Cause of Death
Disputes can arise over the actual cause of death, particularly in cases involving accidents, substance abuse, or medical conditions. If the insurer believes that the cause of death falls under an excluded category or that it was influenced by undisclosed medical conditions, they may deny the claim.
6. Fraud or Suspicion of Fraud
If the insurance company suspects fraud—whether it involves the application process or the claim itself—they may deny the claim outright. Fraud investigations are serious and can cause claims to be delayed for long periods while the insurance company looks into the details.
Steps to Take After a Denied Claim
Insurance companies sometimes deny valid claims, leaving families in a financial bind. If your life insurance claim has been denied in California, there are steps you can take to challenge the decision and get the benefits you deserve. Here are the steps to take:
- Understand the Reason for Denial: The first step is understanding why the claim was denied. Insurers are required to provide a clear explanation for the denial of your claim. This information is crucial as it forms the basis of your appeal.
- Review Your Policy: Carefully review your life insurance policy to ensure that you understand its terms, limitations, and exclusions. This can help you assess whether the insurer’s reason for denying your claim holds up against the policy purchased.
- File an Appeal: Once you have a clear understanding of why your claim was denied and have reviewed your policy, the next step is to file an appeal. This should be done as soon as possible, as there are typically time limits for submitting an appeal. When preparing your appeal, include any additional documentation that supports your case or counters the insurer’s reason for denial.
- Gather Documentation: Collect all relevant documents that support your claim. This might include medical records, death certificates, proof of premium payments, and any communication with the insurance company.
- Speak With a Life Insurance Lawyer: Consulting with a life insurance attorney can provide you with an understanding of your legal rights and options. Our attorneys can help you assess the validity of the denial, guide you through the appeal process, and represent you in negotiations with the insurance company.
- Litigation: As a last resort, you might consider filing a lawsuit against the insurance company. Litigation can be lengthy and complex, so it is essential to rely on attorneys skilled in insurance law. We are prepared to defend your rights in court to ensure you receive the compensation you are entitled to under your policy.
We are people helping people and we are ready to fight for you.
How Our Life Insurance Attorneys Can Help
At a time when you are already coping with the loss of a loved one, the last thing you want to face is a battle with an insurance company. You need an experienced legal team by your side with a strong record of success.
At Kantor & Kantor, our life insurance attorneys are here to guide you through the process and fight for the benefits you are entitled to receive. Here is how we can help.
Expert Policy Analysis
We begin by thoroughly analyzing your policy to understand the coverage specifics and any pertinent exclusions or conditions. This enables us to identify any discrepancies or issues in the insurer’s reason for denying your claim.
Strategic Appeal Planning
Filing an effective appeal requires a strategic approach. Our team will guide you through the entire appeal process, helping you gather the necessary documentation and evidence to build a strong case. We ensure that your appeal addresses the specific reasons why your claim was denied and adheres to all procedural guidelines.
Negotiation With Insurance Companies
Our attorneys are skilled negotiators who will communicate directly with the insurer on your behalf. We aim to reach a fair settlement without the need for litigation, but we are prepared to defend your rights if negotiations do not result in a satisfactory outcome.
Representation in Litigation
If your claim cannot be resolved through an appeal or negotiations, we are ready to represent you in court. Our legal team has experience in litigation, including trials and mediation, and we will fight tirelessly to ensure that justice is served.
Handling Bad Faith Insurance Practices
Sometimes, the denial of a life insurance claim is a result of bad faith insurance practices. If we discover that your insurer has acted in bad faith, we will take the necessary legal actions to protect your interests and seek additional damages for their misconduct.
Contact an Experienced California Life Insurance Lawyer Today
We take the time to listen to your story, understand your unique situation, and work with you to build a case that reflects the truth of your claim. If your life insurance claim has been denied, we are here to provide guidance, support, and legal expertise to give you the best possible chance at success.
Contact our California life insurance attorneys at 818-886-2525 for a consultation.
