Why Do Insurers Recheck Medical Records Before Paying Out? 
Life insurance claims may seem like a straightforward process, but they often require thorough investigation before insurers pay out a claim. One critical part of that process involves rechecking the deceased’s medical records. Insurers review medical histories for various reasons, including verifying the legitimacy of the claim, preventing fraud, and ensuring compliance with policy terms. For families and beneficiaries, this may feel like an unnecessary delay. However, the purpose behind this step is to make sure the claim is valid and meets the conditions outlined in the policy. While this may seem tedious or frustrating, it is part of an effort to maintain the integrity of the life insurance system and protect the interests of all involved parties. Trief Olk & Dror is well-versed in handling claims that face challenges in this area, offering legal assistance to those navigating denied or delayed life insurance payouts. 1. Fraud Prevention: A Primary Concern for Insurers
One of the main reasons insurers recheck medical records is to prevent fraud. While most life insurance policies are purchased in good faith, there are unfortunate cases of fraudulent activity where the policyholder misrepresents their health history to secure a policy they wouldn’t otherwise qualify for. Fraudulent claims can result in significant losses for insurance companies, and this is why the review of medical records is critical. When an individual applies for a life insurance policy, they are asked about their medical history. If they fail to disclose certain health conditions or lie about their past treatments, it could result in the insurer paying out a claim based on false information. Insurers regularly cross-check the cause of death and related medical conditions against the medical history to ensure the details match up. If discrepancies are found, the insurer may deny the claim or conduct further investigations.
2. Verifying Health Conditions and Disclosures
Insurance policies often come with clauses that require full disclosure of any pre-existing health conditions. For example, if a person applies for life insurance and neglects to mention they have a heart condition, the insurer may find out about it when they recheck medical records after the person passes away. The health history revealed during the review may have an impact on the validity of the claim, especially if the cause of death is related to a pre-existing condition. In such cases, insurers may argue that the deceased individual failed to provide an accurate picture of their health at the time of application, potentially invalidating the policy or reducing the payout amount. Therefore, ensuring that all health conditions are disclosed at the time of purchasing the policy is vital to avoid complications during the claims process.3. Policy Lapse and Exclusions: Protecting Against Unintended Denials
Another reason why insurers review medical records is to ensure that the claim is not subject to any exclusions or policy lapses. Most life insurance policies contain clauses that exclude certain types of coverage, especially if the death occurs within a specified period after the policy is issued or if the insured allowed the policy to lapse. These exclusions can also apply if the insured died due to a condition that was excluded from coverage. For example, many life insurance policies have a “contestability period” during which the insurer can investigate a claim in greater detail. If the policyholder dies within this period, the insurer may review medical records more thoroughly to ensure the cause of death is not related to any pre-existing conditions that were excluded from coverage. In some cases, if the insurer finds that the claim falls under one of these exclusions, they may deny the payout or offer a reduced amount. Understanding the terms and conditions of your life insurance policy is key to avoiding misunderstandings and delays in the event of a claim. It’s important to keep your medical history up to date and be aware of any clauses that could affect your coverage.
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
4. Regulatory Compliance: Insurers Must Follow the Law
Insurance companies are bound by strict regulations to ensure that they pay out claims fairly and in a timely manner. Rechecking medical records helps insurers comply with state and federal laws that govern life insurance policies. These regulations are in place to protect consumers and ensure that insurers fulfill their contractual obligations. For example, if a beneficiary files a claim and the insurer fails to recheck medical records, they may be in violation of regulations that require due diligence in the claims process. Insurers must follow these regulations to avoid fines, penalties, or reputational damage. This further reinforces the importance of insurers conducting thorough investigations into claims, especially when it involves medical records.5. Ensuring Fairness: Protecting Both Insurers and Beneficiaries
While rechecking medical records may seem like an extra step in the process, it is ultimately designed to ensure fairness for both the insurer and the beneficiary. Insurance companies want to make sure that they are paying out on valid claims, and beneficiaries want to receive the full benefit they are entitled to under the policy. If the insurer fails to conduct a proper review, it may result in a payout that was never meant to happen, which could be harmful to both the insurer and the beneficiaries in the long run.Settlements & Verdicts
What You Can Do to Avoid Delays in Your Life Insurance Claim
To ensure a smooth life insurance claims process, there are a few steps that beneficiaries can take:- Be Honest About Medical History: It’s critical to be transparent when applying for life insurance. Failing to disclose important health information can lead to claim denials later on.
- Keep Your Health Records Up to Date: If there are changes to your health, make sure your insurance company has the most up-to-date information.
- Understand Your Policy Terms: Review your life insurance policy’s terms and conditions to understand what is covered, what is excluded, and the contestability period.