Common Reasons for Life Insurance Claim Denials
A life insurance claim can be denied for several reasons, and not all of them are easy to understand. One of the most common reasons is related to the application process itself. Sometimes, the insurance company may claim that the policyholder made mistakes or gave incorrect information when applying for the policy. This could include things like failing to mention a medical condition or misreporting their health status. If the insurance company believes the information provided was inaccurate, they might deny the claim on the grounds of “material misrepresentation,” which means they think the incorrect information would have changed the terms of the policy or prevented the policy from being issued in the first place. Another reason life insurance claims get denied is due to unpaid premiums. Life insurance requires regular payments, and if the policyholder misses payments, the policy can lapse. If the policyholder passed away after the policy lapsed, the insurance company might refuse to pay the claim. Sometimes, beneficiaries don’t even know that the policy was no longer active, which can lead to a surprising denial when they file a claim. Insurance companies might also deny claims if the death falls within the contestability period. In New Jersey, as in many other states, life insurance policies usually have a contestability period of two years. This means that if the policyholder dies within the first two years of purchasing the policy, the insurance company has the right to investigate the claim more closely. If they find anything that seems questionable, they might deny the claim, even if the death itself was covered by the policy.
What to Do If Your Life Insurance Claim Is Denied
If you find yourself facing a life insurance claim denial, it can be overwhelming. Many beneficiaries don’t know where to turn when their claim is refused. The good news is that a denial is not necessarily the end of the road. There are several steps you can take to challenge the denial and potentially secure the benefits you are owed. First, you should carefully review the denial letter provided by the insurance company. This letter should explain why the claim was denied, and it is crucial to understand the reasons behind the decision. It is possible that the denial was based on a misunderstanding or incorrect information. In some cases, insurance companies make mistakes or overlook important details that could support the claim. Once you understand the reason for the denial, you should gather any documents or evidence that could help your case. This might include medical records, proof of payments, or any correspondence with the insurance company. If the denial was based on unpaid premiums, you might be able to show that the payments were made or that there were extenuating circumstances that caused the lapse. If the claim was denied due to material misrepresentation, you may need to gather evidence to prove that the information provided on the application was correct or that any mistakes were not significant enough to affect the policy. In some cases, the policyholder may have provided the information in good faith, and the insurance company may not have properly explained the questions on the application.
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
The Role of Bad Faith in Life Insurance Claim Denials
Unfortunately, not all life insurance claim denials are made in good faith. Sometimes, insurance companies deny claims without a legitimate reason or refuse to pay out benefits even when the policy is valid. This is known as acting in bad faith. If you believe that your life insurance claim was denied unfairly, it is important to know that you have the right to challenge the denial and hold the insurance company accountable. Bad faith denials can happen when insurance companies delay payments without a valid reason, fail to investigate claims properly, or use unreasonable excuses to avoid paying benefits. In these cases, beneficiaries may have legal grounds to take action against the insurance company. It can be difficult to know if a denial was made in bad faith, but if you suspect this is the case, it may be helpful to seek legal advice to understand your rights. New Jersey has laws in place to protect beneficiaries from bad faith actions by insurance companies. If your claim was denied in bad faith, you might be able to recover more than just the original policy benefits. Some beneficiaries have been able to recover additional compensation, including damages for the emotional distress and financial difficulties caused by the denial.How a Life Insurance Guide Can Help
Life insurance policies are complex, and dealing with a denied claim can be even more confusing. Many beneficiaries in New Jersey find it difficult to navigate the claims process on their own, especially when they are grieving the loss of a loved one. This is where a life insurance guide can step in and provide the support and guidance you need. A guide who understands life insurance law can help you review the denial letter, gather evidence, and file an appeal. If necessary, they can also negotiate with the insurance company on your behalf to try to resolve the issue without going to court. In cases where the denial cannot be settled through negotiation, a guide can help you file a lawsuit to recover the benefits you are entitled to.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.