Denial or Delay of a Life Insurance Claim
People who purchase life insurance want to know their loved ones will be provided for even if they are no longer here to do it. Life insurance policies may be purchased by individuals, or provided through employer’s benefit packages. Banks often offer an option to buy life insurance to cover client bank loans or charge card balances in the event of the policy holder’s disability or death.
When a Life Insurance Claim is Denied
Adding to the recent loss of a loved one, beneficiaries can be shocked and distressed to find that that their life insurance claim has been denied. While there reasons why a life insurance claim can be legally turned down, there are many cases where claims have been wrongfully denied by the insurance company. In a large number of situations, careful investigation done by an experienced lawyer can reveal the beneficiary’s right to benefits.
How Can a Life Insurance Claim Be Legally Denied?
Lapse in premiums. A life insurance claim can be denied if the payments for coverage were allowed to lapse. If you do not make your payments, your life insurance is no longer in effect and your beneficiary will not be able to claim benefits when you are deceased.
What About The Grace Period?
If payment has not been made, the policy holder usually has a 30 day grace period from the due date, to make the payment without penalty. If the policy holder dies, within the grace period and as long as the insurance company has been paid, the insurance company must honor the claim.
If payments have lapsed for an extended time period, the insurance company may be willing to re-instate the policy holder, if you contact them and let them know your wishes. However if the policy holder dies after the grace period, and no premiums were paid, the insurance company can refuse payment.
Within The First Two Years
Life insurance claims can be investigated and denied if the policy holder dies within the contestability period. This is a period of 2 years from the time the insurance policy came into effect. When this happens, the insurance company usually goes back through the forms and medical information that were part of the initial policy application. If they find errors or omissions in the original paperwork, that show material representation, the claim can be denied.
What is Material Misrepresentation?
Certain information such as medical history, habits or occupation could influence the insurance company’s decision on policy pricing and whether or not to grant the life insurance policy at all. If the policy holder withheld or lied about important information, that would have changed the insurance company’s original evaluation, the claim could be legally denied. Although further investigation of the original paperwork, may reveal mistakes, these inconsistencies do not constitute material misrepresentation if the policyholder would have been granted a life insurance policy in spite of them. Only if the incorrect information shows material representation, can your claim be legally denied.
There Is a Way Out. Don’t Give Up
If your claim has been denied, or unduly delayed, do not give up.
You should expect to receive your claim cheque within thirty days from the date your application was submitted. If your claim has been outright denied or put on the back burner, it is imperative that you deal with this dispute as soon as possible. It is common for insurance companies to make errors that benefit themselves and unfairly punish you for fictional errors or omissions. They understand the laws and the legal wording in the policies and count on the probability that you do not.
With the burden of losing a loved one, many people do not have the physical or financial resources to fight for their rights. Insurance companies hope you will get tired of the fight and give up. Scott Furlong Ford lawyers fight for the rights of our clients and regularly win the benefits they are entitled to. If we don not think you will win, we will not take your case. We know the laws, the wording and the strategies employed by insurance companies. We fight to win. If we don’t win, you don’t pay.
Please call us for a free consultation to determine your rights to benefits for your life insurance claim. If we agree to take your case, there is no charge for our services until your case is won.