Why Life Insurance Claims Are Denied 
Life insurance claims can be denied for several reasons, and not all of these reasons are valid. Understanding why a claim was denied is the first step in determining whether the denial is justified or whether there is an opportunity to challenge it. One common reason for denial is material misrepresentation. In this situation, the insurance company may claim that the policyholder misrepresented important details about their health, occupation, or lifestyle when applying for coverage. However, insurers sometimes misinterpret or misapply this information, leading to a wrongful denial.
Another reason for denial is a policy lapse. If a policyholder has missed premium payments or allowed their policy to lapse, the insurer may deny the claim, stating that the coverage was no longer in effect at the time of death. However, there are instances where the policyholder may have been incapacitated or otherwise unable to pay premiums, which could provide grounds for a legal challenge to the denial.
A third reason life insurance claims are denied is due to the contestability period. Most life insurance policies have a contestability period, typically lasting two years after the policy is issued. During this period, the insurer has the right to investigate and deny claims if they find any discrepancies or errors in the policyholder’s application. While this is a standard provision in many policies, it can sometimes be misapplied by insurers, leading to unjust denials.
Why You Shouldn’t Accept the First Denial
It’s easy to feel defeated after receiving a denial letter from an insurance company. However, accepting that denial without a legal review is often a mistake. Insurance companies are large corporations with vast resources, and they routinely deny claims as a matter of practice. Many beneficiaries do not have the experience or knowledge needed to challenge these denials effectively, making them more likely to simply accept the insurer’s decision. Here are a few reasons why you should never accept a life insurance claim denial without consulting a lawyer.Mistakes Can Happen
One of the key reasons to have a lawyer review a denied claim is that mistakes can happen. Insurance companies process thousands of claims every year, and it’s not uncommon for an error to occur in the claims process. This could include misinterpreting the policyholder’s medical history, overlooking important documents, or incorrectly applying policy exclusions. A lawyer specializing in denied life insurance claims can spot these mistakes and help ensure that your claim is evaluated correctly.
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
Insurance Companies Can Be Challenged
Insurance companies are for-profit entities that often prioritize their bottom line over paying out claims. While they may appear to be acting in good faith, many beneficiaries find that insurers will try to minimize payouts or deny claims altogether. An experienced attorney can help challenge the insurer’s decision by thoroughly investigating the facts, gathering supporting evidence, and appealing the denial. Lawyers who specialize in life insurance claims have a deep understanding of the law and know how to navigate the complex process of appealing a claim denial.Legal Expertise Makes a Difference
Understanding your rights as a beneficiary is not always easy, especially when dealing with legal jargon and complex policy language. Life insurance policies are often written in complicated terms that can be difficult for the average person to understand. A lawyer can help you decode the fine print, explain the specifics of your policy, and advise you on the best course of action. Additionally, lawyers can assess whether the insurance company violated any state or federal regulations, which may give you grounds to sue for bad faith.Settlements & Verdicts
The Legal Process of Challenging a Denial
If you decide to challenge a life insurance claim denial in New York, the process typically involves several steps. First, the denial letter will be carefully reviewed to understand the reason for the insurer’s decision. Your lawyer will assess whether the denial was based on an incorrect interpretation of the policy terms or whether the insurer failed to consider all relevant information. In some cases, the insurer may not have followed proper procedures in denying the claim, which could open the door for a legal challenge. Once the reason for the denial is understood, your attorney will begin gathering documentation to support your case. This may include medical records, a death certificate, the original life insurance policy, and any other relevant documents that may help prove the claim should not have been denied. In some cases, experts in medical or other fields may be called upon to provide additional testimony. If the insurer refuses to reverse its decision after receiving the necessary documentation, your lawyer may file an appeal. Insurance companies are often required by law to provide an appeals process, and your lawyer can help guide you through this process, ensuring that all necessary information is submitted in a timely manner. If the appeal is unsuccessful, litigation may be necessary. Going to court can be a lengthy and expensive process, but it may be the only way to secure the benefits owed to you. In some cases, a lawsuit can result in a favorable settlement or court judgment that forces the insurance company to pay the claim.The Value of Legal Representation in Denied Life Insurance Claims
Working with a skilled attorney can significantly increase your chances of success when challenging a denied life insurance claim. Here are a few reasons why legal representation is so valuable:- Knowledge of State-Specific Laws: New York has specific laws and regulations that govern life insurance claims. A New York-based attorney, such as those at Trief & Olk, understands these laws and how they apply to your case. They will be able to use this knowledge to your advantage and ensure that your case is handled in accordance with New York law.
- Experience with Insurance Companies: Insurance companies are notoriously difficult to deal with, especially when it comes to denied claims. Lawyers who have experience handling life insurance disputes are familiar with how insurance companies operate and know the strategies they use to deny claims. This gives your lawyer a strategic advantage when negotiating with insurers or presenting your case in court.
- Free Consultations: Many law firms, including Trief & Olk, offer free consultations. This allows beneficiaries to discuss their case without any upfront financial commitment. Even if the lawyer decides not to take on your case, they can provide you with valuable insights into your options and the next steps to take.