Navigating the world of life insurance claims can be overwhelming, especially when a claim is denied. In Massachusetts, many individuals rely on employment-based life insurance policies to protect their families after an unexpected death. However, when these claims are denied, it can create confusion, frustration, and financial stress for loved ones. Understanding the common reasons why employment-based life insurance claims are denied is important for those trying to secure the benefits they are entitled to.
This piece explores some of the most frequent reasons for denied employment-based life insurance claims in Massachusetts. Being aware of these reasons can help individuals and their families take the necessary steps to prevent claim denials, or at least better understand why a denial has occurred. At, Trief & Olk , we are here to guide you through the legal process and help you navigate the complexities of your case.
Lapse in Policy Coverage
One of the most common reasons for a denied life insurance claim is a lapse in coverage. Employment-based life insurance policies typically require regular premium payments. These premiums are often automatically deducted from an employee’s paycheck. However, changes in employment status, such as a leave of absence or job termination, can cause interruptions in premium payments. If premiums are not paid, the policy can lapse, meaning there is no active coverage when the individual passes away. In this situation, the insurance company may deny the claim because the policy was not in force at the time of death.
It is important to regularly check the status of employment-based life insurance policies, particularly during job transitions or extended leaves of absence. Individuals should also confirm that their employer is making the necessary premium payments on time. Even if an employee assumes that their coverage is active, a missed payment or miscommunication with the employer can lead to unexpected issues with their insurance.
Misrepresentation or Non-Disclosure
Another common reason for denied life insurance claims is misrepresentation or non-disclosure. When individuals apply for life insurance, they are typically required to fill out a form detailing their medical history, lifestyle choices, and other personal information. If an individual provides false information or leaves out important details, the insurance company may have grounds to deny the claim. For example, if someone fails to disclose a pre-existing medical condition or provides inaccurate information about their tobacco use, the insurer might argue that they were not given accurate information when they issued the policy.
Insurers rely on the information provided by the policyholder to determine the risk they are taking on by issuing the policy. If they find out that the information provided was inaccurate, they may deny the claim on the grounds of misrepresentation. This is why it is important for individuals to be as honest and thorough as possible when filling out their life insurance application forms.
Policy Exclusions
Every life insurance policy contains specific exclusions. Exclusions are situations or conditions that are not covered by the policy. For example, some policies may exclude coverage for deaths caused by certain activities, such as skydiving or other high-risk sports. Others may exclude deaths related to illegal activities, alcohol, or drug use. Suicide is another common exclusion in many life insurance policies, although some policies will pay out after a certain period has passed since the policy was issued.
It is important to carefully read and understand the exclusions listed in an employment-based life insurance policy. These exclusions can vary from policy to policy, and being unaware of them can lead to unexpected claim denials. If a policyholder dies as a result of an excluded activity or condition, the insurance company may deny the claim.
We contacted Trief & Olk 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 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
Failure to Update Beneficiary Information
A less common but still significant reason for denied claims is the failure to update beneficiary information. Employment-based life insurance policies typically require the policyholder to designate a beneficiary or beneficiaries who will receive the benefits upon their death. Over time, life circumstances may change. For example, someone might get divorced, remarry, or have children. If the policyholder does not update their beneficiary information to reflect these changes, the wrong person might be listed as the beneficiary, or no one may be listed at all.
When the beneficiary information is outdated, it can lead to disputes or delays in the claim process. In some cases, the insurance company may deny the claim outright if they cannot determine who the rightful beneficiary should be. It is important to regularly review and update beneficiary information to avoid complications after the policyholder’s death.
Disputes Over Employment Status
Employment status is crucial when it comes to employment-based life insurance claims. If a claim is made after the policyholder’s death, the insurance company will typically verify that the individual was still actively employed and eligible for coverage at the time of their death. If there is any dispute over the policyholder’s employment status, the insurer may deny the claim.
For example, if someone dies shortly after leaving their job, there may be confusion over whether or not they were still covered under their employer’s group life insurance policy. In some cases, there may be a grace period where coverage continues for a short time after employment ends, but this can vary depending on the terms of the policy. If the insurer determines that the policyholder was no longer eligible for coverage at the time of death, they may deny the claim.
Clerical Errors
Unfortunately, clerical errors can also lead to denied life insurance claims. In some cases, mistakes made by the employer or the insurance company can result in the policy not being properly activated, premiums not being paid, or the wrong information being recorded. For example, if an employer fails to enroll an employee in the group life insurance plan despite the employee’s eligibility, or if the insurance company fails to process the policyholder’s application correctly, the coverage may not be in place when needed.
While these errors may not be the fault of the policyholder or their beneficiaries, they can still result in claim denials. In these situations, it may be necessary to seek legal help to resolve the issue and fight for the benefits owed.
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Fraud or Suspicion of Fraud
In some cases, life insurance claims may be denied due to suspected fraud. If the insurance company believes that the death was suspicious or involved criminal activity, they may deny the claim pending further investigation. Fraudulent claims, such as those involving false information or intentional harm to the policyholder, can lead to both denial of benefits and legal consequences.
While fraud is rare, insurers have procedures in place to investigate suspicious claims. If they believe that foul play or intentional wrongdoing was involved in the policyholder’s death, they may deny the claim or delay payment until the investigation is complete. Families dealing with these situations may need legal support to navigate the investigation process.
Denied life insurance claims can create significant financial strain and emotional distress for families. When an employment-based life insurance claim is denied, it is important to understand the reasons behind the denial and explore available options for appealing the decision. Insurance companies do not always make the process easy, and families often face a complicated and time-consuming battle to secure the benefits their loved one intended to leave behind.
Settlements & Verdicts
If you or a loved one have had an employment-based life insurance claim denied in Massachusetts, it is important to take action. Legal assistance can be crucial in these situations. A law firm experienced in handling life insurance disputes can review the details of your case, identify the reasons for the denial, and help you navigate the appeals process.
At Trief & Olk, our team is here to support you through this challenging time. We understand the stress that comes with a denied life insurance claim and are committed to helping you fight for the benefits you deserve. Whether the denial is due to a policy lapse, misrepresentation, or another issue, we can help you explore your legal options and work toward a favorable resolution. Contact Trief & Olk today to discuss your case and find out how we can assist you.