Is a Life Insurance Lawsuit Needed When Your Insurance Claim is Delayed?

Life insurance is supposed to protect loved ones in the event of a tragedy, such as the death of a parent or spouse. The insurance provides a financial cushion to pay for immediate expenses related to the death and also for longer term needs, such as mortgage payments and living expenses. The urgent need for financial support immediately after a death is so well-known that some policies provide emergency death benefits, meaning that a specified amount of money ($5,000 to $15,000) is paid immediately upon notification and verification of the death.

When an insured has faithfully paid the premiums on a policy, the expectation of the insured and his or her dependents is that if the insurance is ever needed, the claim and payment process should not add to the family’s trauma.

Unfortunately, many insurance claims are delayed or denied. Still, not every letter delaying or denying a claim warrants a life insurance lawsuit, but retaining legal counsel early can help speed up the process of resolving a denial.

Possible Reasons for a Delay

Life insurance claims may be delayed because the insurance company needs more information about the circumstances surrounding the death. This is especially common if the insured died within two years of obtaining the policy or if the cause of death is nonspecific. If the cause of death could have been from a cause excluded from coverage, the insurance company may want to conduct its own investigation into the cause of death.

Claims may also be delayed if there are questions about information on the application —all questions on the application should have been answered and supporting information such as medical records should have been provided when requested. If that did not happen, additional information may be collected by the insurance company, which takes time.

Delay of payment for a life insurance claim is not necessarily a denial. To fully understand the insurance company’s position, consult with an attorney experienced in life insurance. Lawsuits are rarely needed for delays in payouts, but talking to an attorney up front will help you understand why the insurance claim is not being paid in a timely manner and possible options for speeding up the process.

The issue may be something as simple as an unanswered question on a form or a misplaced document. It may be that medical records relating to the death have not been released to the insurance company. Or it may be a bigger issue that necessitates having an experienced advocate on your side.

Understanding the insurance company’s delay is the first step to resolving the claim. You may be able to provide missing information or supplemental documentation. You may be able to work with the hospital, treating physician or medical examiner to have requested records released. Just having a seasoned lawyer contact the insurance company on your behalf may be enough to speed up the claims process.

Attorney Chad G. Boonswang helps life insurance beneficiaries whose claims are delayed or denied. He knows when negotiations will resolve concerns about claims and when a lawsuit is the best option. Contact him today for a free consultation about your delayed or denied life insurance claim.