Losing a loved one is an especially difficult thing to handle. You are dealing with grief, life changes, and even financial difficulty. You paid for life insurance in order to help protect you and your family from an unexpected death and to ensure your financial security. The problem is, life insurance companies often try to deny coverage to save money.
Life insurance claims are denied for several reasons. We explore why your life insurance company may have denied your claim and what you can do about it.
At the Saxton Law Firm, our insurance attorneys are ready to fight for you. We fight back against insurance denials to protect your rights under the life insurance policy. Schedule a consultation to learn more about how we can help.
Common Reasons Life Insurance Claims Are Denied
While most life insurers pay out the claims made to them, there are several reasons an insurer may try to deny your claim. Below are some of the most common reasons you might encounter:
Failure to Disclose a Known Medical Condition
During the life insurance policy application, you are required to disclose any medical conditions you have or potential risk factors. You are required to give accurate information about your medical history, family history, and much more. Insurers use this information to determine your rate and their level of risk. Insurers also want to know about risky behaviors you might take, such as dangerous occupations or hobbies.
A life insurance company may investigate the death and your claim to determine if any information was withheld. If so, they may deny the life insurance claim.
Failure to Make Premium Payments
One of the most common reasons for claim denials is if the insured failed to pay the required premiums. Life insurance is typically paid yearly or monthly. If the insured did not timely make payments or is behind, the policy may permit the insurance company to avoid payment of the claim.
You may be able to reinstate lapsed life insurance by paying the past premium, any interest, and potential penalties. Most companies have a grace period for missed payments during which you can catch up. Other policies have unique rules that still allow for payment of the claim if premium payments are caught up.
Expired Terms or Failure to Renew
Term life insurance policies only last for a set amount of time. If the insured is still alive when that period passes, the life insurance policy will not pay out. Many policies allow the insured to renew the policy, although this typically requires a new application and higher price.
Death by Suicide or Homicide
Most life insurance policies have some type of “suicide clause” which lasts about two years. If an insured dies by suicide within that period, the life insurance claim will not pay out.
In cases of homicide or murder, a life insurance claim may not pay out to the original beneficiary. If the intended beneficiary caused the insured’s death, state law or the policy may refuse to pay that individual. Typically, however, an alternate beneficiary is still entitled to the funds.
How To Handle a Life Insurance Claim Denial
If you are dealing with a life insurance claim denial, an attorney is ready to help. Many issues can be rectified with a clear understanding of the life insurance policy. In other cases, simply having an attorney involved shows the insurer you are serious and gets them to pay what they owe.
READ MORE: What To Do When a Claim Is Denied
At Saxton Law Firm, our Missouri insurance litigation lawyers are ready to help you with any life insurance issue. Contact Saxton Law Firm for a FREE case review!