Why Life Insurance Claims Are Denied
There are several reasons why a life insurance claim may be denied in Massachusetts. One of the most common reasons is the failure to disclose important information on the life insurance application. Insurance companies rely on accurate information when they decide whether to issue a policy. If there are any omissions or misrepresentations, the insurer may deny a claim later on, arguing that they would not have issued the policy if they had known the truth. This could include failing to report pre-existing medical conditions, previous surgeries, or lifestyle habits like smoking. Another reason claims are denied is the lapse of the policy. Life insurance policies often require timely payment of premiums. If the policyholder misses a payment or stops paying altogether, the policy may lapse, and the insurer will refuse to pay the claim. Even if a person tries to reinstate the policy after it lapses, there may be issues with coverage depending on the length of the lapse or the terms of reinstatement. Suicide is another cause for denial. Many life insurance policies have a suicide clause, which states that if the insured dies by suicide within a certain period—usually two years from the start of the policy—the insurer will not pay out. After this period, however, the policy may pay the full benefit. It is important to carefully read the terms of the policy to understand how such exclusions work. Insurance companies may also deny claims based on accusations of fraud or illegal activity. If the insurer suspects that the insured’s death occurred during the commission of a crime or was the result of fraudulent activity, they may deny the claim. This can lead to complicated legal battles, as families try to prove that the death was unrelated to such activities.
The Contestability Period in Massachusetts
Massachusetts law allows life insurance companies to review claims with special scrutiny during the “contestability period,” which typically lasts two years from the time the policy is issued. During this period, if the insurer discovers that the policyholder provided inaccurate information or omitted important facts on the application, they have the right to deny the claim, even if the death occurred from natural causes. After the contestability period ends, the insurer’s ability to deny a claim is more limited, but they may still refuse to pay if they believe fraud occurred. Understanding the contestability period is essential for anyone who is filing a claim or dealing with a denial in Massachusetts. Families who are unfamiliar with the legal language surrounding life insurance may be confused about why a claim was denied, especially if the cause of death seems unrelated to any inaccuracies on the application. Consulting with someone familiar with these policies can help clarify whether the denial was legitimate and what steps can be taken to appeal the decision.
We contacted Trief, Olk & Dror to help us with a life insurance issue and Shelly Friedland was the attorney assigned to our case. Before Shelly took our case she explained to us that the likelihood of our success without going to court was possible but not likely. Unfortunately we did not get the outcome we had hoped for but it was our decision to not move forward and have our case litigated. Shelly is very knowledgeable and was very straight-forward in her assessment of our case as we moved forward. She was very patient and thorough in answering our questions. She always responded in a timely manner and listened to our concerns. We would certainly recommend Shelly and would use her firm again in the future.”
- John Ramig
If there is any possibility of winning your life insurance case – this is the place to do it for you. They are efficient, honest and will achieve the best possible outcome.
Shelly Friedland worked on my case where a life insurance policy had lapsed and was even a few days beyond the grace period. Farmers had rejected my claim twice and was unwilling to take a second look. Shelly was able to get them to pay the entire claim without going to court, and the full amount was deposited in my account within a couple months. Highest recommendation.”
- Kathleen Brown
Trief, Olk & Dror is a superior law firm. Their attorneys and other legal professionals have a brilliant understanding of the law and the litigation process. They diligently perform their work in an efficient, strategic and cost-effective manner to ensure the best possible outcomes for their clients.
- Christopher Hughes
What to Do After a Denial
Facing a denied life insurance claim can feel like hitting a wall, but it is important to know that denial is not always the end of the road. In Massachusetts, there are several steps you can take if your life insurance claim has been denied. First, carefully review the denial letter from the insurance company. This letter should explain the reason for the denial, whether it is due to a lapse in payment, misrepresentation on the application, or other reasons. Next, gather all relevant documents related to the life insurance policy. This includes the original policy, any communication with the insurance company, medical records, and proof of premium payments. These documents will be necessary to build a case if you decide to appeal the denial. Appealing a denial requires presenting a strong argument to the insurance company, and this can be difficult without legal guidance. Some families attempt to handle the appeal on their own, but this can result in frustration if they are unfamiliar with the specific regulations and requirements in Massachusetts. A knowledgeable guide can help you understand the laws and insurance practices that apply to your case. If the insurance company continues to deny the claim after an appeal, the next step may be to file a lawsuit. This can be a time-consuming and complicated process, and it may require evidence and testimony from medical professionals, witnesses, and even the insurance company’s representatives. Although this route can be daunting, it may be the only way to obtain the benefits that were promised.Life Insurance Denial Statistics
20%
The annual average number of life insurance claims denied.
$50 Million
The yearly average dollar amount of claims denied by life insurance companies.
.2%
The number of claims appealed annually by consumers.