Denial of Life Insurance Claim Due to Claimed Material Misrepresentation
After the policy is issued, if the policyholder passes away within a certain period of time, the life insurance company can go back and review the application. If the insurance company finds that certain information was not accurately presented in the application, the insurance company can “contest” the claim for benefits made by the beneficiaries. In other words, the life insurance company can deny payment. The time period during which the insurer can contest the policy is called the period of contestability. Although the length of the contestability period differs from state to state, in New York, New Jersey, and Massachusetts, the period is two years.
If your loved one or business associate passes away within the contestability period, the insurance company will usually investigate the information provided on the application to determine if the information was accurate. If the life insurance company believes that they have found any significant inaccuracies, referred to as “material misrepresentations,” they can deny the life insurance claim made by the surviving loved ones.
Material misrepresentations are any false statements, whether intentional or not (including omissions) that would have caused the life insurance company to deny issuance (or issue the policy for a higher premium and/or lower amount of coverage) if the life insurance company had known of this information at the time the policy was issued.
Material misrepresentations can occur within the:
- Life Insurance Application
- Life Insurance Application for Renewal
- Life Insurance Policy Amendment
- Life Insurance Application for Late Enrollment
Material misrepresentations must be misrepresentations in your life insurance application that are material enough to cause a life insurance company to deny a life insurance claim because the policy would not have been issued at the same premium.
Some common material misrepresentations include:
- Failure to disclose doctor visits, hospital stays, medical tests
- Employment History
- Assets/Financial Status
- History of Tobacco Usage
- History of Alcohol Usage
- Existence of Other Life Insurance Policies
- Dangerous Hobbies or Traits
If your loved one has died during the contestability period, you can expect the life insurance company to launch an investigation to determine if your loved one made any material misrepresentations on the life insurance application. If the insurance company denies the claim based on an alleged material misrepresentation, the law firm of Trief & Olk can help you appeal the life insurance claim denial. Often times, a material misrepresentation is debatable, and an experienced life insurance attorney is needed to pressure the life insurance company to pay the life insurance claim.
Our experienced life insurance lawyers will work hard to get you the life insurance proceeds you deserve. Insurance companies are often willing to settle out of court, and we have the litigation experience to take your case to trial if needed.